This article is a guest contribution from Bespoke Investment Group.
From the 200 or so key ETFs that we track daily in our ETF Trends report at Bespoke Premium, below we highlight the most overbought ones using our trading range screen. An ETF becomes overbought when it moves more than one standard deviation above its 50-day moving average (DMA). In the trading range charts below, the light red shading represents between one and two standard deviations above the 50-DMA, while the dark red shading represents between two and three standard deviations.
Many of the ETFs listed track European countries, currencies, and US Treasuries. The Sweden stock market ETF (EWD) is the most overbought of the group, followed by agricultural commodities (DBA), and the Swiss Franc (FXF). The British Pound (FXB), the Euro (FXE), and the Yen (FXY) are all overbought, along with the inverse US Dollar fund (UDN). Along with long-term Treasury ETFs being overbought, the junk bond ETF (HYG) and investment grade corporate bond ETF (LQD) are also up there.
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