High Probability ETF Trading: 7 ETFs You Need to Know for Thursday (QQQQ, EZA, EWT, IAU, TYP, XRT, GDXJ)

Many of the major equity index exchange-traded funds will take overbought conditions into trading on Thursday, including the ^SPY^ and the QQQQ (more on the QQQQ below). Still at neutral levels by comparison is the iShares Russell 2000 Index Fund ETF ^IWM^.

Around the world, the ^FXI^ is overbought above the 200-day moving average, closing higher for a fourth trading day in a row, while the ^EWZ^ reversed sharply on Wednesday, pulling back by more than 1%.

Here are 7 ETFs You Need to Know for Thursday.

Overbought conditions have returned to many markets in the United States, including the market for the ^QQQQ^ (below).

QQQQ chart

The QQQQ is up for two out of the past three trading days heading into Thursday’s open. The ETF pulled back into oversold territory for the final two trading days of 2010.

Among country funds that have pulled back into oversold territory above the 200-day moving average are the ^EZA^ and the ^EWT^. Both exchange-traded funds have closed lower for two days in a row as of Wednesday’s finish.

Many gold-related exchange-traded funds have closed down for three days in a row ahead of Thursday’s open. In addition to the gold ETFs noted in yesterday’s 7 ETFs You Need to Know, the ^IAU^ (below) is also lower and in oversold territory above the 200-day in the second half of the week.

IAU chart

Shares of IAU are at their most oversold since mid-December.

Strength in technology shares has helped push inverse leveraged ETFs like the ^TYP^ to oversold extremes as of Wednesday’s close. TYP has closed lower for three days in a row.

Profit-taking in the retail sector has contributed to growing oversold conditions in the ^XRT^ (below).

XRT chart

Both of XRT’s last two closes have been in oversold territory above the 200-day.

One of the more popular ways for traders to play the gold market has been in the  ^GDXJ^, which is in pullback mode along with the other exchange-traded funds of the sector. GDXJ has closed in oversold territory above the 200-day for the past two days in a row.

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 of TradingMarkets.com