High Probability ETF Trading: 7 ETFs You Need to Know for Thursday (RKH, IYF, KRE, EWJ, GSG, DIA, GDX)

U.S. markets rallied just enough on Wednesday to bring most domestic ETF markets out of oversold territory above the 200-day moving average. Among the laggards in this regard is the DIAMONDS Trust Series (more on the DIA below), as well as financial ETFs in general.

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Here are 7 ETFs You Need to Know for Thursday.

Given the aggressive selling in financials, it is little surprise to see that the ^RKH^ is the most oversold fund in our database.

In addition to RKH, which has closed lower for three days in a row, other financial funds like the ^IYF^ and the ^KRE^ (below) have both closed down for the past two consecutive sessions.

KRE chart

Closing for a second session to finish just inside of oversold territory above the 200-day ahead of trading on Thursday was the ^EWJ^ (below).

EWJ chart

One of the more widely-traded Asian country funds, EWJ has gone from overbought to oversold in a single session.

While financial ETFs are in the crosshairs of sellers, buyers continue to drive commodity-based exchange-traded funds like the ^GSG^ higher and deeper into overbought territory above the 200-day moving average.

Of the major U.S. equity index ETFs, the weakest rally on Wednesday was in the ^DIA^ (below).

DIA chart

In fact, the DIA is only slightly above oversold territory above the 200-day moving average as trading begins on Thursday and may still be a target for high probability traders looking for markets where sellers have potentially overreached.

Even though gold ETFs like the ^GDX^ did not close higher on Wednesday, the equity-based gold fund remains in overbought territory above the 200-day moving average, where it has traded for the past three days in a row.

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David Penn is Editor in Chief of TradingMarkets.com