High Probability ETF Trading: 7 ETFs You Need to Know for Monday (RTH, RSX, EZA, EWC, EEM, FAS, OIL)

Traders will face freshly-recovering markets when trading begins on Monday, with many of the ETF markets that began to move higher on Friday edging toward overbought territory above the 200-day moving average.

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Here are 7 ETFs You Need to Know for Monday.

With the stock market moving higher at the end of last week, the number of exchange-traded funds (ETFs) pulling back into oversold territory ahead of Monday’s open is relatively small. Among those ETFs that have pulled back toward levels from which they have historically made significant short term gains is the ^RTH^ (below).

RTH chart

RTH has closed higher for the past two trading sessions, but these modest advances have not been enough to bring the fund up from oversold territory, where the ETF has closed for four consecutive trading days.

A number of country funds have become overbought as traders moved back into riskier markets during the oversold bounce. This includes country fund as diverse as the ^RSX^, the ^EZA^ and the ^EWC^ (below).

EWC chart

Shares of EWC have been rangebound for the past few days, with Friday’s market seeing the fund rally to the topmost end of that range.

Friday’s bullishness helped many previously oversold funds rally into strength. This includes regular, non-leveraged ETFs like the ^EEM^, which rallied more than 1% on Friday, as well as leveraged funds like the ^FAS^ (below).

FAS chart

Closing lower for three days in row late last week, FAS closed twice in oversold territory before rallying into strength on Friday, gaining more than 4%.

Oil commodity ETFs rallied on Friday from short, one-day pullbacks. Up nearly 2% was the ^OIL^.

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David Penn is Editor in Chief of TradingMarkets.com