Three ETFs to Sell Short

From a technical perspective, the Dow looked like it was setting up a classic triple-top formation earlier this year with the first two peaks on June 1 and June 15. That would have required a third peak at the 13,700 price level before a breakdown to lower levels.

But with the rally to a new high above 14,000 on July 17 and subsequent sell-off, the formation is starting to resemble a head and shoulders pattern. That would imply sideways trading, bouncing between the 12,700 and 13,500 levels for a few weeks before retesting the March lows.

Even if much of the market is range-bound, our technical indicator screens still manage to find ETF trading opportunities to either sell short or to go long.

Technically bearish ETFs have a five-day moving-average share price below their 10-day moving average share price, with a moving average convergence-divergence indicator giving a fresh sell signal within the last 10 days. The convergence-divergence indicator uses exponential moving averages to find turning points in the price movements of securities.

ETFs that are considered technically bullish are the complete opposite. They have a five-day moving average above their 10-day moving average, and a convergence-divergence indicator giving a fresh buy signal within the last 10 days. They must also have set a new 52-week high in the last five trading days.