High Probability ETF Trading: 7 ETFs You Need to Know for Tuesday (GLD, GDX, GDXJ, QQQQ, EWG, PPH, FXI)

High probability traders will find gold-related exchange-traded funds at the top their oversold lists when trading begins on Tuesday. From leveraged funds to ETFs based on the stock prices of the gold mining juniors, many ETFs have closed down for a second or even third consecutive session.

Increasingly overbought are technology-related ETFs, especially, including the tech-dominated PowerShares QQQ Trust ETF (more on the QQQQ below). This has resulted in exceptionally oversold conditions in inverse leveraged ETFs such as the ^SSG^ and the  ^TYP^.

Here are 7 ETFs You Need to Know for Tuesday.

Gold-related exchange-traded funds continue to be among the most oversold above the 200-day moving average going into trading on Tuesday. This includes both bullion-related ETFs like the ^GLD^ and mining-related funds like the ^GDX^ (below).

GDX chart

Shares of GDX have closed lower for three days in a row, pulling back by more than 2% on Friday alone. The last two closes in the GDX have been in oversold territory above the 200-day.

Down two days in a row above the 200-day is the ^GDXJ^. Both days represented closes in oversold territory.

The ^QQQQ^ (below) has closed higher for five consecutive trading days ahead of Tuesday’s open.

QQQQ chart

All five of these closes in the QQQQ have been in extreme overbought territory above the 200-day, with each session closing with 2-period RSIs of more than 90.

Also overbought above the 200-day is the ^EWG^ (below).

EWG chart

EWG had pulled back for five days in a row early in the month, creating the oversold conditions that have led to the European ETFs current, four-day advance.

The ^PPH^ has closed lower for two days in a row heading into trading on Tuesday. The fund is at its most oversold levels of the new year.

Although drifting lower for the past two days, the ^FXI^ remains overbought above the 200-day moving average.

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