High Probability ETF Trading: 7 ETFs You Need to Know for Wednesday (EWA, EWT, EPP, IWO, IJR, EZU, EFA)

Trading in the ETF markets remained relatively mild ahead of Wednesday’s open. The ^SPY^ has closed higher for four days in a row, while the ^QQQQ^ has closed higher for three out of the past four trading days. Both ETFs are in overbought territory above the 200-day.

The same cannot be said for the majority of international ETF markets, which have been increasingly oversold in recent days. As such, high probability traders will likely find more opportunities to buy weakness overseas than in domestic ETF markets.

Here are 7 ETFs You Need to Know for Wednesday.

Going into trading on Wednesday, both the ^EWA^ and the ^EWT^ (below) have closed in oversold territory above the 200-day.

EWT chart

Shares of EWT have closed lower for two days heading into Wednesday’s trading.

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In addition to specific country funds, regional ETFs like the ^EPP^ have also been under the influence of strong selling in recent days. The EPP have closed in oversold territory for the past two days.

As I noted yesterday, some of the most overbought ETF markets right now are in small cap equities. Closing higher for a fourth consecutive trading day on Tuesday were shares of the ^IWO^ and the ^IJR^ (below).

IJR chart

All of the fund’s last four closes have been in overbought territory above the 200-day moving average. This suggests that IJR is increasingly vulnerable to a reversal in the near term.

Near, but not yet in, oversold territory ahead of trading on Wednesday is the ^EZU^. EZU has closed lower for two out of the past three trading days, actually closing in oversold territory on Friday and Monday.

<EZU chart

Down three out of the past five trading days, the ^EFA^ is another regional/country fund that has been pulling back over the past few sessions and has become more and more oversold over the course of the week.

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David Penn is Editor in Chief of TradingMarkets.com