High Probability ETF Trading: 7 ETFs You Need to Know for Tuesday: USO, OIL, FXI, VWO, EZA, EWH, IWM
Commodities – especially oil-related commodities – dominate the ranks of the most oversold ETFs heading into trading on Tuesday. While this has not translated into lower prices and more oversold conditions for oil-related equity ETFs, traders and investors in those funds should be on the lookout for any potential weakness should the oil equity funds begin to move in sympathy with the commodity ETFs.
Here are 7 ETFs You Need to Know for Tuesday.
Two of the most oversold ETFs in our database are the ^USO^ and the ^OIL^. Both ETFs have 2-period RSIs of less than 10 and are down three days in a row.
The ^FXI^ (below) is the most oversold country fund heading into trading on Tuesday.
FXI has closed lower for three out of the past four trading days and is trading just above its 200-day moving average. The ETF was last in oversold territory above the 200-day in late January.
Also oversold above the 200-day is the ^VWO^ (below). Shares of VWO have closed lower for four days in a row heading into Tuesday’s open.
Except for the sharp sell-off at the end of January, VWO is trading at its lowest levels of the past several weeks.
Trading just outside of oversold territory above the 200-day moving average are both the ^EZA^ and the ^EWH^ (below).
Down two out of the past three trading days, EWH could become a target for high probability traders if the fund experiences any significant selling over the next few days.
Up nearly 1% in trading on Monday was the ^IWM^. IWM has closed in overbought territory above the 200-day for three out of the past four trading days.
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