High Probability ETF Trading: 7 ETFs You Need to Know for Wednesday (VDE, OIH, USO, HYG, JNK, SPY, EWJ)

After opening sharply lower on Wednesday, U.S. markets gained ground over the course of the trading day. Among the big beneficiaries were energy funds, many of which closed lower, but still rallied enough on the day to climb out of oversold territory above the 200-day.

That said, there are still a wealth of exchange-traded funds – including country funds representing national stock markets in Germany, Sweden and the United Kingdom – that are very much in oversold territory. The same can be said for U.S. domestic sector-based ETFs such as semiconductors (see the  ^SMH^) and financials (see the ^XLF^).

Here are 7 ETFs You Need to Know for Wednesday.

On the edge of oversold territory above the 200-day moving average are a number of energy-based exchange-traded funds (ETFs) such as the ^VDE^ and the ^OIH^.

While equity-based energy and oil funds have yet to pull back fully into oversold territory, commodity based funds and notes like the ^USO^ (below) are already deeply oversold above the 200-day.

USO chart

Shares of the USO, for example, have closed in oversold territory for three out of the past four trading days heading into Wednesday’s open.

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High yield corporate bonds have also been under the influence of strong selling in recent days. Pulling back into oversold territory above the 200-day moving average are both the ^HYG^ and the ^JNK^ (below).

JNK chart

JNK has closed lower for five out of the past six trading days, four of which were in oversold territory.

Despite gapping down sharply at the open on Tuesday, the ^SPY^ (below) rallied over the course of the trading day to close significantly off session lows. The SPY still remains in oversold territory, however, where it has traded for three out of the past four trading days.

SPY chart

Tuesday’s pullback put the SPY at its lowest closing level since the end of January.

Extremely oversold heading into trading on Wednesday, the ^EWJ^ rallied back toward its 200-day moving average in Tuesday’s session after plunging below that level on Monday’s open.

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David Penn is Editor in Chief of TradingMarkets.com