High Probability ETF Trading: 7 ETFs You Need to Know for Wednesday (UNG, USO, EWZ, SLV, EWS, ILF, RKH)

Overbought conditions characterize most ETF markets heading into Wednesday’s trading, with only the ^TIP^ trading in oversold territory above the 200-day moving average.

Among the more overbought funds as trading begins on Wednesday are oil and energy funds, both those based on the price of crude oil as well as equity-based ETFs based on the share prices of oil and gas companies.

Here are 7 ETFs You Need to Know for Wednesday.

Two of the most overbought funds in our database are commodity funds: the ^UNG^ and the ^USO^. UNG has long traded below its 200-day moving average while USO trades above that level.

Among country funds, the most overbought is the ^EWZ^ (below).

EWZ chart

Shares of EWZ have closed higher for four days in a row, climbing back above their 200-day moving average.

In addition to the strong buying and overbought conditions in natural gas and crude oil ETFs, the ^SLV^ (below) has rallied for the past four consecutive trading days.

SLV chart

Before the ETF’s four-day rally, shares of SLV had pulled back for three days, including a final two in oversold territory above the 200-day moving average.

Other country funds trading in overbought territory above the 200-day moving average include the ^EWS^ and the ^ILF^.

Both ETFs have closed higher for four days in a row and are increasingly due for a pullback. Both EWS and ILF are trading above their 200-day moving averages, though EWS is only back above the 200-day after dipping below that level during its most recent pullback.

Financial ETFs remain those closest to oversold territory heading into Wednesday’s session and a number of these funds could find themselves oversold by the end of the week should there be any significant selling over the next few days. This includes ETFs like the ^RKH^ (below).

RKH chart

Shares of RKH reversed back to the downside on Tuesday after gaining for three days in a row.

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David Penn is Editor in Chief of TradingMarkets.com