High Probability ETF Trading: 7 ETFs You Need to Know for Wednesday (EWP, EWA, IWM, QQQQ, VWO, EEM, XRT)

Going into the second half of the holiday-shortened week, traders will find an abundance of exchange-traded funds (ETFs) that have pulled back into oversold territory above the 200-day moving average. These ETFs range from equity index funds like the ^OEF^ to country funds like the ^EWZ^ and even sector ETFs like the ^XLV^.

Here are 7 ETFs You Need to Know for Wednesday.

In a world of oversold ETFs, the^EWP^ is king, earning the top spot as the most oversold ETF trading above its 200-day moving average in our database.

Not far behind EWP is the ^EWA^ (below).

EWA chart<>

Shares of EWA pulled back by more than 3% on Tuesday, closing back in oversold territory above the 200-day.

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In addition to the iShares S&P 100 Index Fund ETF noted above, other more familiar equity index ETFs – from the  ^IWM^ to the ^QQQQ^ (below) have also retreated to oversold territory above the 200-day moving average.

QQQQ chart<>

Tuesday’s sell-off, which took the QQQQ down more than 1%, was the stock’s first selling day after closing higher for four days in a row.

Emerging markets, the unheralded beneficiaries of QE2, have also begun to pullback over the past few days. Closing lower by more than 3% were both the ^VWO^ and the ^EEM^.

Despite widespread selling, traders and investors continue to pile into retail stocks, making the ^XRT^ (below) the most overbought exchange-traded fund in our database.

XRT chart<>

Closing higher for five trading days in a row, shares of XRT have also closed in overbought territory for five days in a row. Tuesday’s close marked another year-to-date high in the fund.

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David Penn is Editor in Chief of TradingMarkets.com