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).

ICF chart

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).

KRE chart

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).

XLK chart

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