High Probability ETF Trading: 7 ETFs You Need to Know for Thursday (RWR, ICF, URE, KRE, QQQQ, FXY, XLK)
The stock market edged back into overbough territory above the 200-day moving average heading into trading on Thursday. For most of the major U.S. equity index ETFs like the ^SPY^ and the ^IWM^, Wednesday’s up close marks the second overbought close in the past three trading days.
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Here are 7 ETFs You Need to Know for Thursday.
No sector is more oversold in the current market environment than real estate and REIT-related funds. Of the less than 10 ETFs trading in oversold territory above the 200-day moving average, fully half of them are real estate or REIT-related.
Let’s take a look at some of these ETF markets.
Down two days in a row heading into trading on Thursday is the ^RWR^. Wednesday’s pullback of just over 1% helped take the fund into oversold terririty above the 200-day.
Also down for the past two consecutive trading days and in oversold territory above the 200-day moving average is the ^ICF^ (below).
Shares of ICF was just in oversold territory above the 200-day a week ago, as a three-day pullback led to a short, three-day rally to new short term highs.
For traders looking for leveraged ways to take advantage of current weakness in the real estate and REIT industry, the ^URE^ is also back in oversold territory above the 200-day after a two-day pullback.
In addition to weakness in real estate and REIT related funds, financials have also remained weaker than other sectors in the stock market. This includes weakness in the ^KRE^ (below).
Financial ETFs like KRE have been trading very much like the real estate funds and REIT funds in today’s report.
Although moving gradually higher and now overbought above the 200-day, the ^QQQQ^ has been rangebound essentially since advancing from its oversold lows of last week.
Also rangebound in recent days has been the ^FXY^. The currency fund has moved sideways for the past four days in a row after breaking out to significant new highs last week.
Closing at its highest level in six days is the ^XLK^ (below).
The XLK has closed in overbought territory above the 200-day moving average for two out of the past three trading days. Note that ^ORCL^, a holding in the XLK, reports quarterly earnings after the bell on Thursday.
David Penn is Editor in Chief of TradingMarkets.com