High Probability ETF Trading: 7 ETFs You Need to Know for Wednesday (EWT, EWJ, UYG, ERY, IWM, QQQQ, EGPT)

The strong move higher in the major indices on Tuesday left few exchange-traded funds in oversold territory going into trading on Wednesday. Gold ETFs, for example, from the ^GLD^ to the ^DGP^ have rallied into overbought territory above the 200-day moving average.

Country funds, including many Asian ETFs that had been in oversold territory up until recently, have also made significant gains ahead of Wednesday’s open.

Here are 7 ETFs You Need to Know for Wednesday.

Up more than 2% in trading on Tuesday were both the ^EWT^ and the ^EWJ^ (below).

EWJ chart

Shares of EWJ closed in oversold territory above the 200-day for two days in a row before Tuesday’s bounce higher.

Rallying to a new high on Tuesday was the ^UYG^, which gained more than 3% to close back above its 5-day moving average.

Strength in energy shares has sent the ^ERY^ back into deeply oversold territory ahead of trading on Wednesday.

ERY chart

The last time ERY was this oversold was early in the first half of January. The 3x leveraged fund rallied by more than 5% over the next two days.

Up more than 2% and 1% respectively on Tuesday, neither the ^IWM^ nor the ^QQQQ^ has yet to take out its previous 2011 high during the current rally.

Rallying by well over 5% on Wednesday and overbought is the ^EGPT^ (below).

EGPT chart

Traders interested in EGPT should be wary of liquidity issues, insofar as EGPT is not as liquid as a number of other country funds, including other developing/emerging markets ETFs.

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