TradingMarkets 7 ETFs You Need to Know for Friday

• By David Penn
• On 3:41 pm EDT, Thursday October 29, 2009

Oversold extremes led to strong buying on Thursday as markets that had been on the retreat for four or more days in a row were bid dramatically higher. Although few ETFs (exchange-traded funds) have returned all the way back to overbought territory above the 200-day moving aveage, oversold funds - even among bond ETFs - were few and far between.

Here are 7 ETFs You Need to Know for Friday.

Soaring by more than 7% on Thursday, the ProShares Ultra Financials ETF (NYSE:UYG - News) closed above its 5-day moving average for the first time in five days. Four days in oversold territory above the 200-day moving average was enough to send the SPDR KBW Bank ETF (NYSE:KBE - News) higher by more than 3% on the day.

In pulling back from an intraday gain of more than 2%, small cap based exchange-traded funds (ETFs) like the iShares Russell 2000 Index ETF (NYSE:IWM - News) have entered neutral territory between their recent oversold lows and their overbought highs from mid-month.

Among the most oversold of country ETFs was the Market Vectors Russia ETF (NYSE:RSX - News), which had a 2-period RSI of less than 2 as of Thursday's close. RSX bolted higher by more than 8%, retracing 50% of its decline over the past four days.

With money flowing back into stocks, buying pressure in bond ETFs like the iShares Barclays Aggregate Bond Fund ETF (NYSE:AGG - News) faded, edging lower but not low enough to enter oversold territory above the 200-day.

Precious metals ETFs were among the big gainers on Thursday. Gold miners outpaced gold bullion as the Market Vectors Gold Miners ETF (NYSE:GDX - News) gained more than 4% compared to the advance of just under 2% of the SPDR Gold Shares (NYSE:GLD - News), which reflects the price of bullion.

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