Saturday, March 20, 2010

Top 20 ETFs to Buy and To Sell For Week of March 22: Plus The 'ETF Horribilis'

We calculated the relative strength values of all ETFs that trade in the US and then sorted them by RSI-A. We use the average of all three time frame indicators as it is a closer approximation of the correct buy and sell signals.

These indicators provide a good idea of whether an ETF is oversold or overbought. Some of these values we found are very scary.

Top 20 Most Oversold ETFs:

Look at the monthly indicator for FAZ: 1.02. Now FAZ is a dreadful instrument that should be avoided at all costs. The 2nd most oversold: the equally dreadful UNG, another 'ETF Horribilis' to avoid all all costs.

This is tough investing.

The fact that many of these deeply oversold ETfs are leveraged speaks for itself.

Top 20 to Sell:

The top (as in most overbought) are FBT, FXH, IFNA, XRT. FBT mirrors cross section of companies in the biotechnology industry; FXH is health care. IFNA is real estate and XRT is the retail industry.

Note that FAS, the FAZ counterpart is not on the top overbought list. In fact it only appears in position 204! Stay away from these, as we have said so many times.

You may receive technical analysis and alerts of these stocks, sent automatically to you, by entering the symbols in the Technical Trend Analysis Tool, (powered by INO).

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