If a picture tells a thousands words, then what do you think short term traders are making of the picture that is yesterday’s intraday reversal off the worst levels of the day?
However you look at and analyze market action, the kind of reversal we saw on Monday is a microcosm of the same sort of response to extreme oversold conditions that we often see as high probability traders in stocks and exchange-traded funds (ETFs) on an end of day basis. As Larry Connors noted this morning in his Daily Battle Plan (click here for your free, 7-day trial), the intraday rally likely “took care of a lot of scared money.”
For today, we will look at the few stocks that have closed in oversold territory, as well as a handful of exchange-traded funds that have earned multiple signals from our High Probability ETF Trading Software. Should the sellers return to the markets in any strength over the next day or two, then we should expect new signals as well as additional, scale-in signals in those funds already pulling back into oversold territory.
Stocks:
Down three days in a row heading into trading on Tuesday are shares of ^OSTK^ (below).
Overstock.com may be a familiar name for high probability stock traders. The stock was in oversold territory above the 200-day moving average in late April, shortly before rallying from the high.
Other stocks pulling back into oversold territory for high probability traders to consider include ^LGF^ and ^AMED^.
Remember, when trading high probability trading strategies for stocks, buying oversold markets after they have pulled back further on an intraday basis can be a winning approach to maximizing high probability edges. To learn more about this strategy, called buying on “intraday weakness,” click here.
Exchange-traded funds (ETFs)/Leveraged ETFs:
Among exchange-traded funds many of the ETFs earning the most signals from our High Probability ETF Trading Software are country funds, specifically country funds for India. Consider the ^INP^ (below).
Also among those country funds that high probability ETF traders should be on the look out for is the Powershares India Portfolio ^PIN^, which earned multiple signals over the past few days, the ^EWW^, and the ^RSX^.
There are also a few ETFs that have earned signals from our Software that are outside the “country fund” category. These include sector funds like the ^XHB^ and the ^XLF^ (below).
With Larry Connors’ High Probability ETF Trading Software, short term traders have access to the same kind of “buy the selling, sell the buying” trading strategies that professional traders have used successfully for decades.
Click here to start your free trial to Larry Connors’ High Probability ETF Trading Software today!
David Penn is Editor in Chief at TradingMarkets.com.