Short-Term, High-Probability Mean-Reversion Indicator: FXI and EPI Very Oversold

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 |  Includes: DBA, DIA, EEM, EFA, EPI, EWY, EWZ, FXI, GDX, GLD, IBB, IWM, IYR, OIH, QLD, QQQ, RTH, SDS, SLV, SMH, SPY, SSO, TBT, TNA, TZA, USO, VXX, XL, XLB, XLE, XLF, XLI, XLU, XLV, XLY
by: Andrew Crowder

A trade looks imminent.

Two of the ETFs that I follow in my strategy have pushed into “very oversold” territory. The iShares FTSE China 25 Index Fund (NYSEARCA:FXI) and the WisdomTree India Earnings Fund (NYSEARCA:EPI) have RSI (2) readings of 0.51 and 0.54, respectively.

As a result, will most likely enter a short-term position in one of the aforementioned ETFs.

click to enlarge

Short-Term High-Probability, Mean-Reversion Indicator – as of close 5/04/11

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in FXI, EPI over the next 72 hours.