Profit-taking has turned into something like panic selling in a number of sectors here in the second half of the week. With a number of exchange-traded funds – especially in the materials sector – pulling back for multiple days in a row, oversold conditions are as widespread as they were a month ago during the mid-March correction.
Joining the sell-off in commodity and basic materials related funds, financial funds have also begun to pullback in earnest. Traders should keep in mind the scheduled earnings announcement from ^BAC^ Friday morning before the market opens.
Here are 7 ETFs You Need to Know for Thursday.
Closing lower for a fifth day in a row is the ^XLI^. The pullback in the ETF puts the fund at its most oversold levels of the year.
Basic materials stocks have also come under heavy selling over the past week. Indicative of the retreat in this sector are the pullbacks in exchange-traded funds like the ^XLB^ and the ^IYM^ (below).
Both ETFs have closed lower for five days in a row heading into trading on Thursday.
Among the more oversold country/regional funds as trading begins on Thursday is the ^ILF^ (below).
Shares of ILF have pulled back for three days in a row, with all three closes in oversold territory above the 200-day moving average.
The ^SPY^ (below) pulled back for five days in a row and is one of the most oversold of the major U.S. equity index ETFs.
The SPY has closed in oversold territory for four consecutive trading sessions.
Down three out of the past four trading sessions – and moving lower early in trading on Thursday – is the ^XLF^. Down four in a row is the fund’s 2x leveraged colleague, the ^UYG^.
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David Penn is Editor in Chief of TradingMarkets.com