Over the past several weeks, the Market Vectors Vietnam ETF (VNM) has demonstrated excellent relative strength, as it has been one of the few ETFs to hold support of its 20-day EMA during the recent round of selling pressure. Yesterday, VNM undercut, but managed to reclaim support of its 20-day EMA. If VNM can form a reversal candle or post an “inside day”, it could present a possible buying opportunity particularly if the market finds support at the current levels.

On Friday, the ProShares UltraShort Oil and Gas ETF (DUG) formed a reversal candle, as it undercut support at the 3-day low but rebounded to close near the day’s high. A move above the four day high of $24.81 could present a buy entry trigger for DUG.

Yesterday, on a pickup in volume, the Direxion Semiconductor Bear 3x ETF (SOXS) formed a reversal candle as it undercut its 20-day EMA and 50-day MA but eventually closed near session highs. Reversal candles serve to shake out the weak hands in a trade and sweep poorly positioned stops. Now that a shakeout has occurred, SOXS offers a buying opportunity above the four day high of $35.42. We are placing SOXS on the watchlist. Details for this setup can be found in the watchlist section of the newsletter.

In the April 18th newsletter we stated that the SPDR S&P Metals and Mining ETF (XME) was a potential short candidate. Yesterday, XME repeated Tuesday’s price action, as it formed a reversal candle and closed near session lows. A move below yesterday’s low of $48.22 could present a shorting opportunity in this ETF. We are placing XME on the watchlist. For our subscribers, trade details are provided in the watchlist segment of the newsletter (see ETF notes section above for an aleternative to shorting XME).

Yesterday, on light volume, the SPDR S&P Metals and Mining ETF (XME) formed a reversal candle as it attempted but failed to reclaim its 20-day EMA. A move below yesterday’s low of $48.43 could provide a short entry trigger for XME.

Since gapping up on April 9th, the ProShares UltraShort Oil and Gas ETF (DUG) has been consolidating in a tight flag-like formation. A volume fueled move above the five day high of $25.50 could provide a buying opportunity in DUG.

Over the past two sessions, the S&P Select Materials SPDR Fund (XLB) has found resistance at its declining 20-day EMA. XLB also have considerable resistance at $36.30. A move below Friday’s low of $36.10 could present a shorting opportunity in this ETF.

Presently, there are very few setups that meet our trade entry criteria. Further, we still have a sell signal in the market. Two ETFs that could provide shorting opportunities into a bounce are the PowerShares DB Base Metals ETF (DBB), and the iShares Dow Jones US Telecom ETF (IYZ). Both ETFs are possible short candidates on a rally into resistance near their respective 20-day and 50-day moving averages.

The Vanguard MSCI Europe ETF (VGK) has been one of the weaker ETFs during the rally off of last summer’s lows. During the rally, VGK struggled just to reclaim its 200-day MA. During the recent pullback, VGK collapsed below all of its major moving averages, including the declining 200-day MA. A rally into the declining 20-day EMA and 200-day MA could present a shorting opportunity in this ETF.

The ProShares UltraShort EURO (EUO) has been consolidating in a pennant like formation over the past three sessions. EUO offers two potential long entries. The first would be if EUO rallies above the three day high of $19.82. EUO could also offer a buying opportunity on a pullback and/or undercut of its 20-day and 50-day moving averages. We are monitoring this ETF closely for a possible long entry.