The Top Five Overbought ETFs in Today's Market

By
A A A

After a month long correction, the S&P has managed to bounce slightly higher, but that hasn't stopped some of the ETFs I follow from pushing into a short-term overbought state. And not only are a few of these ETFs in a short-term overbought state, but the major market indices are back at areas of very strong overhead resistance. Couple a short-term overbought state with strong overhead resistance and we could see some short-term weakness going forward.

Again, many of the ETFs I follow for the Options Advantage service have pushed into a short-term "very overbought" so while the rally in the ETFs mentioned below looks strong, I do expect a retreat or at minimum a pause over the next week or so.

Some of the most short-term overbought ETFs at the moment are:


  • Proshares Ultrashort 20-year Treasuries ( TBT )            97.8 (very overbought)
  • SPDR Consumer Dis ( XLY )                                         92.6 (overbought)
  • SPDR Homebuilders ( XHB )                                         91.2 (overbought)
  • SPDR Consumer Staples ( XLP )                                    92.7 (overbought)
  • SPDR Financials ( XLF )                                                90.7 (overbought)

The aforementioned ETFs are just a few of the highly-liquid, overbought ETFs I follow in the market. In fact, out of the 40+ ETFs that I follow for the Options Advantage service 11 are in an extreme overbought state.

Typically, when this type of overbought set-up occurs I will fade the market by selling bear call spreads with a high-probably of success.

If you would like to learn more about the strategies I use in the Options Advantage service please do not hesitate to email me at optionsadvantage@wyattresearch.com .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , Stocks

Referenced Stocks: TBT , XHB , XLF , XLP , XLY

Wyatt Investment Research

Wyatt Investment Research

More from Wyatt Investment Research:

Related Videos

Stocks

Referenced

Most Active by Volume

145,866,496
  • $19.97 ▼ 8.39%
77,086,047
  • $132.65 ▲ 1.82%
72,286,233
  • $8.10 ▲ 2.27%
68,255,406
  • $9.33 ▼ 6.61%
57,535,673
  • $48.03 ▲ 0.33%
52,002,044
  • $15.56 ▼ 0.51%
40,772,381
  • $34.59 ▼ 1.93%
35,765,720
  • $26.88 ▲ 0.30%
As of 4/27/2015, 04:15 PM


Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com