High Probability ETF Trading: 7 ETFs You Need to Know for Thursday (QQQQ, XLK, VUG, IWO, IYF, UYG, EWP)

Traders on Thursday likely will see continued oversold conditions, with a number of major equity index ETFs for the United States closing lower again on Wednesday and moving deeper into oversold territory above the 200-day.

Relatively speaking, energy funds like the ^XLE^ and the ^IYE^ have avoided the worst of the selling, with both funds rallying by 2% going into today’s trading.

Here are 7 ETFs You Need to Know for Thursday.

Selling continues to be strong in the Nasdaq 100, with the ^QQQQ^ closing deeply in oversold territory above the 200-day moving average for a second day.

Pulling back for a third day in a row ahead of trading on Thursday were shares of the ^XLK^ (below).

XLK chart

XLK has closed in oversold territory above the 200-day for the past two consecutive trading days.

The current pullback has provided many traders and investors with the opportunity to take profits in growth and small cap stocks as seen by the pullbacks in exchange-traded funds like the ^VUG^ and the ^IWO^ (below).

IWO chart

Down two sessions in a row going into trading on Thursday, both of the past two down days in IWO – and VUG, for that matter – have been in deeply oversold territory above the 200-day.

In addition to the financial funds noted in yesterday’s 7 ETFs You Need to Know, another pair of banking/financially-oriented ETFs has pulled back into oversold territory as of Wednesday’s close: the ^IYF^ and the ^UYG^ (below).

UYG chart

UYG has pulled back for two days in a row, both in oversold territory above the 200-day. The UYG has not been as oversold as it is currently since rallying above its 200-day moving average in early December.

Trading just outside of oversold territory going into Thursday’s trading is the ^EWP^. Any additional selling in EWP will likely take the fund into oversold territory here in the second half of the week.

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