High Probability ETF Trading: 7 ETFs You Need to Know for Thursday (IAU, EZA, SPY, FXI, IYF, UYG, IWM)
Traders likely will face moderately overbought conditions when trading begins on Thursday. Although a number of major exchange-traded funds advanced on Wednesday, the bounces in most ETFs were strong enough to lift most funds out of oversold territory, but not enough to bring back the chronically overbought conditions that had prevailed before recent selling.
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Here are 7 ETFs You Need to Know for Thursday.
With most markets moving higher on Wednesday, there were a few exchange-traded funds (ETFs) that were close, if not in, oversold territory above the 200-day moving average. These ETFs include a gold ETF and a country fund.
The gold ETF that is pulling back toward oversold territory is the ^IAU^ (below).
Shares of IAU fell for two out of the past three days, closing in oversold territory before Wednesday’s bounce. The bounce has only slightly lifted the ETF out of oversold territory however, and renewed selling could easily take the fund back to those levels.
Also near oversold levels above the 200-day is the ^EZA^. EZA had closed lower for three out of the past four days before bounding higher by nearly 1% on Wednesday.
Renewed strength in many financial stocks helped boost the fortunes of the ^SPY^ (below).
Wednesday’s close in oversold territory was only the fourth such close since the ETF rallied back above the 200-day moving average in mid-September.
Back to year-to-date highs was the ^FXI^. The fund had pulled back to oversold territory on Tuesday, and was up by more than 2% on Wednesday.
I noted strength in financials earlier. This strength was even more evident in sector funds like the ^IYF^ (below).
The rally of more than 1% on Wednesday put the fund just outside of overbought territory below the 200-day moving average.
Also overbought below the 200-day are shares of the ^UYG^. UYG was up more than 2% in trading on Wednesday.
Gaining 1% in Wednesday’s trading was the ^IWM^. The stock had closed lower for two out of the past three trading days ahead of Wednesday’s rally.
With 7 professional, quantified trading strategies for trading both bull and bear markets, High Probability ETF Trading by Larry Connors and Cesar Alvarez was voted one of the top 10 trading books of 2009 by SFO Magazine. Click here to find out why.
David Penn is Editor-in-Chief at TradingMarkets.com.