High Probability ETF Trading: 7 ETFs You Need to Know for Wednesday (DGP, EWJ, RSX, IYZ, SLV, EWI, XRT)

Overbought conditions returned to the stock market ahead of trading on Wednesday. Energies continue to lead, with the ^XLE^ rallying to new highs.

Traders looking for pullbacks can find them in the ETF market for gold, with a number of leveraged and non-leveraged gold funds oversold and closing lower for a second day entering midweek.

Here are 7 ETFs You Need to Know for Wednesday.

Gold continues to be a major destination for sellers heading into midweek. In addition to the gold ETFs mentioned in yesterday’s 7 ETFs You Need to Know, leveraged gold ETFs like ^DGP^ (below) continue to trade in oversold territory above the 200-day moving average.

DGP chart

Joining the ^EWJ^ as one of the few country funds trading in oversold territory is the ^RSX^. Shares of RSX pulled back on Tuesday after four consecutive closes in especially overbought territory.

Traders and investors looking for exposure to the rapidly growing telecom sector should keep an ETF like the ^IYZ^ on their watchlists.  IYZ includes among its top holdings ^T^,  ^VZ^ and ^S^.

Trading just outside of oversold territory is the ^SLV^ (below).

SLV chart

Shares of SLV have closed lower for three out of the past four trading days.

Also closing just outside of oversold territory above the 200-day moving average is the ^EWI^. EWI has closed down for two out of the past three sessions.

Up more than 1% ahead of trading on Wednesday and retracing all of the previous session’s pullback was the ^XRT^ (below).

XRT chart

Holding the stock of retailers from ^PCLN^ to  ^FDO^, XRT is back in overbought territory above the 200-day.

With 7 professional, quantified trading strategies for trading both bull and bear markets, High Probability ETF Trading by Larry Connors and Cesar Alvarez was voted one of the top 10 trading books of 2009 by SFO Magazine. Click here to find out why.

David Penn is Editor in Chief of TradingMarkets.com