High Probability ETF Trading: 7 ETFs You Need to Know for Monday (TIP, EWJ, VPL, IYR, EWC, EWY, FXY)

The stock market remains overbought heading into trading on Monday. Closing higher for a third day in a row and deep into overbought territory above the 200-day moving average were the ^SPY^, the ^QQQ^ and the ^IWM^.

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Here are 7 ETFs You Need to Know for Monday.

Among the few funds trading in oversold territory above the 200-day moving average is the ^TIP^. TIP has closed lower for five out of the past six trading days and has become increasingly oversold as the stock market has advanced.

Also oversold above the 200-day is the ^EWJ^ (below).

EWJ chart

Shares of EWJ have closed lower for three out of the past four trading days, and has been trading just cents above its 200-day moving average for the past week.

Just outside of oversold territory above the 200-day is the ^VPL^. Like the EWJ, VPL is trading very close to its 200-day, having closed lower for three out of the past four sessions.

Should the broader markets sell-off on the first trading day of the week, exchange-traded funds like the ^IYR^ and the ^EWC^ (below) could find themselves slipping from just ouside oversold territory to just inside oversold territory in a matter of days.

EWC chart

EWC pulled back to close below its 5-day moving average on Friday for the first time in more than a week.

The most overbought exchange-traded fund in our database heading into Monday’s open is the ^EWY^ (below).

EWY chart

Shares of EWY have closed higher for seven days in a row, the past three days in overbought territory above the 200-day.

The ^FXY^ began to break down from a short, five-day consolidation range. The consolidation range developed after FXY retreated from a larger break to the upside just over a week ago.

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David Penn is Editor in Chief of TradingMarkets.com