High Probability ETF Trading: 7 ETFs You Need to Know for Tuesday (IEV, EWQ, EWG, VGK, XRT, GDX, UYM)
The ^SPY^ and the ^IWM^ both pulled back modestly on Monday – so modestly, in fact, that both ETFs remain in overbought territory above the 200-day. Also closing in overbought territory on Monday – for a fifth straight day – was the ^QQQQ^.
A number of exchange-traded funds (ETFs) have pulled back toward oversold territory over the past few days. Although not yet technically oversold, these ETFs – many of them based on European equities markets – could enter oversold territory by midweek should selling in these funds increase.
Here are 7 ETFs You Need to Know for Tuesday.
Pulling back for a second consecutive trading session on Monday were shares of the ^IEV^. The fund closed just outside of oversold territory ahead of trading on Tuesday.
Also pulling back for the past two sessions in a row were a pair of country funds, the ^EWQ^ and the ^EWG^ (below).
Shares of EWG closed at their most oversold level since the first day of November, when a one-day pullback anticipated a three-day rally of more than 4%.
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The last time the ^VGK^ was in oversold territory was the beginning of the month. After a three-day rally, the VGK has pulled back for the past two days, but has not returned to oversold territory above the 200-day moving average.
Among the more overbought sectors heading into trading on Tuesday is retail, as witnessed by the ^XRT^ (below), which has closed higher for five straight trading days above the 200-day.
The rally in XRT comes in the wake of a one-day pullback that took the exchange-traded fund into oversold territory at the beginning of November.
Up well over 2% on Monday and closing higher for a third consecutive trading day on Monday were shares of the ^GDX^ (below).
The last time GDX closed in oversold territory above the 200-day was back in late October. From that oversold close, GDX gained more than 5% over the next four trading days.
One leveraged exchange-traded fund on our list is the ^UYM^. The ETF, which is leveraged two to one to the Dow Jones Basic Materials Index, closed higher for a third straight day on Monday.
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David Penn is Editor-in-Chief at TradingMarkets.com.