High Probability ETF Trading: 7 ETFs You Need to Know for Wednesday (QID, SDS, RSX, FAZ, EWY, OIH, XRT)

Oil-based commodity ETFs remain under selling pressure heading into trading on Wednesday. Closing lower for four consecutive trading sessions are both the ^USO^ and the ^OIL^.

Increasingly overbought conditions have helped create exceptionally oversold conditions in inverse leveraged ETFs, including those noted below. Remember to adjust position sizes accordingly when trading leveraged ETFs, inverse or non-inverse.

Here are 7 ETFs You Need to Know for Wednesday.

Continued strength in both the Nasdaq 100 and S&P 500 have contributed to severely oversold conditions in the ^QID^ and the ^SDS^ (below).

SDS chart

Shares of SDS have closed lower for four days in a row, entering extreme oversold territory on Tuesday.

Down more than 1% and into oversold territory above the 200-day moving average on Tuesday were shares of the ^RSX^.

The ^FAZ^ (below) closed in oversold territory in trading on Tuesday after pulling back by well over 1%.

FAZ chart

Tuesday’s close marks the most oversold level in FAZ in more than a month.

The ^EWY^ closed lower on Tuesday for the fourth day out of the past five.

Oil equity exchange-traded funds have begun to join their commodity-based brethren in pulling back above the 200-day moving average. Down just inside oversold territory on Tuesday was the ^OIH^ (below).

OIH chart

Despite closing in oversold territory, buyers managed to push OIH higher and off the lows of the day in Tuesday’s trading.

Increasingly overbought above the 200-day moving average, the ^XRT^ has closed higher for four consecutive trading days and was up more than 1% on Tuesday alone.

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