High Probability ETF Trading: 7 ETFs You Need to Know for Tuesday (SMH, XLK, GLD, SLV, DIG, QLD, XLF)
Sellers pressed forward on the first trading day of the week, sending a variety of exchange-traded funds into oversold territory in a variety of markets – from Indian equities to technology to gold.
By asset class, bonds continue to be among the most oversold, with funds like the ^AGG^ typical of the strong selling in the group.
Here are 7 ETFs You Need to Know for Tuesday.
Technology remains the most oversold sector going into trading on Tuesday. Pulling back into oversold territory above the 200-day moving average are the ^SMH^ and the ^XLK^ (below).
Shares of XLK have closed lower for three days in a row, with all three of those days closing in oversold territory. XLK is at its most oversold since breaking out above the 200-day moving average in mid-September.
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On the commodities front, exchange-traded funds representing both gold and silver closed in oversold territory above the 200-day ahead of Tuesday’s open. This includes the ^GLD^ and the ^SLV^, both of which have closed lower for the past two trading days.
Profit-taking among energy stocks has resulted in a pullback in the ^DIG^ (below).
Only two days ago, DIG closed at extremely overbought levels. These overbought extremes were one clue that the ETF was due for a reversal.
Among leveraged index exchange-traded funds (ETFs), the ^QLD^ (below) is among the most oversold.
Down four out of the past five trading days, QLD is at its most oversold since early October, one day before the QLD shot higher by well over 4%.
Not yet in, but near, oversold levels above the 200-day moving average are shares of the ^XLF^. The ETF rallied above the 200-day moving average at the beginning of November.
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David Penn is Editor-in-Chief at TradingMarkets.com.