Ultimate PowerRatings Trading Report: Upgrades in Real Estate and Technology (QQQQ, SMH, VNQ, IYR, XLY)
As trading on Thursday comes to a close, most markets continue to drift lower toward their 200-day moving averages. This includes popular, highly-traded exchange-traded funds (ETFs) like the ^QQQQ^, as well as a number of lesser known funds that have managed to be both oversold and above their 200-day moving averages.
The modest selling on Thursday did help a number of ETFs gain small ETF PowerRatings and Leveraged ETF PowerRatings upgrades. In most of these instances, these upgrades resulted in funds moving from 8 or 9 to 9 or 10. This is a positive development for traders looking for opportunities on the long side, as larger and larger edges are starting to appear in a variety of markets.
Among these markets experiencing PowerRatings upgrades are real estate and REITs, with funds like the ^VNQ^ and the ^IYR^ earning late session upgrades from 9 to our highest ETF PowerRating of 10 late in the day on Thursday.
Small cap stocks are also under selling pressure over the past few days. This has resulted in PowerRatings upgrades for funds like the ^IWM^ and the ^IJS^ to earn upgrades to our highest PowerRating of 10. In doing so, both IWM and IJS join top-rated ETFs like the ^VB^, the ^VBR^ and the ^VBK^.
Other sectors with ETFs earning PowerRatings upgrades to our highest levels include members of the technology sector such as the ^SMH^ and the ^QTEC^. Traders may also want to keep an eye on consumer cyclicals or consumer discretionaries insofar as the ^XLY^ is also among the highest-rated ETFs heading into trading on Friday.
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David Penn is Editor in Chief at TradingMarkets.com.