Most equity index ETFs continued to experience selling pressure on Tuesday, but neither the Dow DIAMONDS ETF ^DIA^ nor the PowerShares QQQ ETF [QQQQ|QQQQ] were able to pull back enough to reach oversold territory above the 200-day moving average. Additional selling, however, could see ETFs like these, as well as major sector ETFs like the Financial Select Sector SPDRS ETF [XLF|XLF], dipping into oversold territory before week’s end.
Here are 7 ETFs You Need to Know for Wednesday.
Among the most oversold exchange-traded funds going into midweek are a number of bond ETFs including the iShares iBoxx Investment Grade Corporate Bond ETF [LQD|LQD], which has closed in oversold territory for the past three consecutive trading days – and five out of the past six.
Also included in this group are bond funds like the iShares Barclays TIP Bond ETF [TIP|TIP], which has closed in oversold territory below the 200-day moving average for six straight trading days.
The iShares FTSE/Xinhua China 25 Index ETF [FXI|FXI] is one of the more oversold country ETFs going into Wednesday’s trading, having retreated to oversold territory on Tuesday after pulling back for a second consecutive session.
Plunging below its 5-day moving average for the first time since December 17th was the ProShares Ultra Oil & Gas ETF [DIG|DIG]. DIG had a 2-period RSI of more than 99 as of Monday’s close – an extremely overbought condition – making the fund’s Wednesday pullback no surprise to high probability ETF traders.
Government and high grade corporate bond ETFs aren’t the only ones becoming more and more attractive as potential high probability ETF trades. The Barclays Capital High Yield SPDRS Bond Fund ETF [HYG|HYG] pulled back for a second day on Tuesday, entering oversold territory above the 200-day moving average.
From a 2-period RSI of more than 90 on Monday, the iShares Silver Trust ETF [SLV|SLV] dropped more than 2% intraday on Tuesday, sending its 2-period RSI below 20.
One day after dropping into oversold territory above the 200-day moving average, the PowerShares DB U.S. Dollar Bullish ETF [UUP|UUP] was back on the upswing in Tuesday’s trading and back to more neutral levels.