Pullbacks in the QQQ, Tech, as Buyers Pile into Small Caps: 7 ETFs You Need to Know for Wednesday
The markets have become somewhat divided, with the S&P 500 still trading in overbought territory and the Nasdaq 100 pulling back into oversold territory. At the same time, as noted below, small cap stocks continue to be a major attraction for traders, with at least three small cap based funds trading in overbought territory above the 200-day.
Here are 7 ETFs You Need to Know for Wednesday.
Among the few exchange-traded funds (ETFs) trading in oversold territory heading into trading on Wednesday are a number of funds related to the Nasdaq 100.
Pulling back for a second day to close in oversold territory, for example, are both the ^QQQ^ and the ^QLD^ (below).
Closing in overbought territory for four day in a row before the recent, two-day pullback, the QLD is trading at its most oversold levels in more than two weeks.
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Looking at country and regional funds, the ^VPL^ has retreated to oversold territory just a few cents above its 200-day moving average. VPL represents equity markets from countries around the Pacific Rim such as Japan, Australia, and Hong Kong.
The ^XLK^ (below) has closed lower for four days in a row heading into Wednesday’s market.
XLK’s last two closes have been in oversold territory above the 200-day.
After closing lower for four days in a row, shares of the ^USD^ rallied by more than 3% in Tuesday’s trading. The move higher in USD was typical of Tuesday’s oversold bounces in semiconductor stocks and exchange-traded funds.
Many of the most overbought exchange-traded funds heading into trading on Wednesday represent the market for small cap stocks. This includes ETFs like the ^IWM^, as well as the ^VBK^ (below).
Shares of VBK have closed higher for six consecutive trading days, all six in overbought territory above the 200-day.
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David Penn is Editor in Chief of TradingMarkets.com