Retail, Financials Lead the Stock Market Back Toward Oversold Territory: 7 ETFs You Need to Know for Monday

Heading into trading on Monday, all of the exchange-traded funds in today’s report have some of the biggest short term edges based just one of more than 30,000 quantified ETF trading strategies found in The Machine ETF Trader.

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Here are 7 ETFs You Need to Know for Monday

The retail sector is among the most oversold heading into trading on Monday. These high probability ETF traders will have their eyes on funds like the ^XRT^ and the ^RTH^ (below).

RTH chart

Shares of RTH pulled back by more than 1% on Friday, selling off after a three-day advance took the fund to near overbought territory above the 200-day moving average last week.

Also very oversold heading into trading on Monday is the financial sector. Here, both non-leveraged ETFs like the ^XLF^ and the ^UYG^ have reversed sharply to the downside.

UYG chart

UYG sold-off by more than 2% in trading on Friday. Despite the selling, the fund is still above its oversold lows from last week.

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Among country funds, the most oversold above the 200-day moving average is the ^EWT^. Shares of EWT dropped by more than 1% ahead of trading on Monday, closing lower for a second day in a row after Friday’s session.

A second consecutive lower close has helped pull the ^SMH^ (below) down into oversold territory above the 200-day moving average.

SMH chart

SMH has closed down for five out of the past six trading days.

Weakness in financials has helped the ^SPY^ outpace its rivals to the downside. The SPY edged lower into oversold territory on Friday’s close while ETFs representing the Nasdaq 100 and Russell 2000 have yet to follow suit.

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David Penn is Editor in Chief of