U.S. stocks rallied into strength in trading on Monday, as traders continued to take advantage of recently oversold conditions above the 200-day moving average. The rally was broad-based, but while energy stocks were the biggest attractions, financials continue to lag behind on a relative basis.
With hopes that the very worst may be over in Japan, it is little surprise to see exchange-traded funds like the ^EWJ^ up well over 2% after Monday’s big rally. For traders considering exposure to Japan in the wake of the crisis, 7 ETFs You Need to Know this morning includes a few Japanese ETFs that traders may want to keep an eye on over the next few days.
Here are 7 ETFs You Need to Know for Tuesday.
The ^JSC^ is one option for traders and investors looking to take advantage of the growth potential of small cap stocks in Japan. JSC has closed higher for three days in a row, gaining more than 3% on Monday alone.
Also closing higher for three days in a row and climbing back above its 200-day moving average is the ^DFJ^.
Traders looking to bet against higher prices for Japanese stocks – or investors looking to hedge positions in Japanese stocks – may want to learn more about the ^EWV^ (below).
The EWV tracks 200% of the inverse of the daily performance of the MSCI Japan Index. The ETF is currently retreating from a move into significantly overbought territory below the 200-day moving average.
Given the strength of Monday’s move higher, there are precious few exchange-traded funds still in oversold territory above the 200-day moving average. One of the few is the ^TIP^.
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The return of buyers to the technology sector has helped the ^TYH^ (below) higher by more than 5% in trading on Monday.
Monday marked the fund’s third consecutive higher close, and its first close above the 5-day moving average since near the beginning of the month.
Energy continues to be a primary destination for traders and investors. Up more than 3% heading into Tuesday’s trading is the ^XLE^ (below).
XLE had closed in oversold territory as recently as last Wednesday and is now up more than 5% from those oversold lows.
Is there a way for exchange-traded fund investors and traders to get exposure to the markets of the Middle East? The ^GULF^ is one of the few options available. GULF includes stocks from Middle Eastern countries like the U.A.E., Kuwait and Qatar.
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David Penn is Editor in Chief of TradingMarkets.com