Overbought Markets in Tech, Energy, Will Buyers Embrace the Banks? 7 ETFs You Need to Know for Thursday
With buyers bidding both technology and energies higher at midweek, the question remains as to whether or not traders will begin to move into financials, as well, which have lagged other sectors of the market. Overall, overbought conditions characterize the ETF market going into Thursday’s session, increasingly the likelihood of short term profit-taking in the near future.
Special to 7 ETFs You Need to Know: Larry Connors’ webinar and preview of the upcoming Summer Semester of the 2011 Swing Trading College is TODAY, Thursday, April 21st. To learn more and to save your spot at today’s free presentation, click here now.
Here are 7 ETFs You Need to Know for Thursday.
Heading into trading on Thursday, there is only one exchange-traded fund (ETF) in our database that is trading in oversold territory above the 200-day moving average: the ^KBE^ (below).
Shares of KBE have closed lower for nine out of the past ten trading days and are an example, albeit extreme, of the weakness in financial stocks here in the second half of the week.
Other widely-traded financial funds, such as the ^UYG^ and the ^XLF^, have climbed into neutral territory after two consecutive higher closes.
By far, the most overbought funds heading into Thursday’s trading are precious metals ETFs: the ^SLV^ and the ^GLD^ (below).
The GLD has closed higher for the past six trading days in a row – the past five in overbought territory above the 200-day moving average. The same is largely true for the SLV, although all six of the ETF’s past six closes have been in overbought territory.
The ^SPY^ rallied more than 1% on Wednesday to close at its highest level in more than a week. Up well over 2% was the SPY’s leveraged colleague, the ^SSO^ (below).
Any significant follow-through to the upside in the market for SSO could put the fund at its highest levels of the year.
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