Taking a look at the most overbought and oversold ETFs with just a few minutes left before the close on Thursday, there are precious few exchange-traded funds (ETFs) trading in oversold territory

above the 200-day moving average.

But looking at the other side of the high probability trading equation the sell the buying side reveals not just a number of ETFs (leveraged and non-leveraged) that have become overbought

below the 200-day moving average, but an entire sector that may have moved too far too fast to the upside and become vulnerable to short term reversal.

The Bounce in Basic Materials

Of the few funds that are overbought below the 200-day moving average, the number of ETFs that are related to basic or industrial materials is eye-catching.

The ^SLX^ is among the most overbought ETFs in the market, earning a 2-period RSI of more than 90 along with the ^IYM^, the ^UYM^ and the ^XME^ (below).

Country Funds Ready to Fall Back?

While basic materials are the sector that should probably attract the most attention from high probability traders, exchange-traded funds linked to countries like Russia and the United Kingdom are

also becoming overbought below the 200-day moving average.

Examples of these overbought country funds included representatives of the BRIC economies of Brazil, Russia, India and China in the form of the ^RSX^ and the ^EWZ^, both of which gained more than 3% on Thursday. As for the ^EWU^, the fund was back in overbought territory below the 200-day

moving average after a Thursday rally of well over 2%.

Oversold ETFs: Only the Lonely

Based on our research, there are only two exchange-traded funds that are oversold above the 200-day moving average that may be of interest to high probability traders. Those two funds are the

^DUG^ and the ^UUP^ (below). The reversal in UUP has been especially sharp, with the ETF moving from overbought territory to oversold territory in two sessions.

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David Penn is Editor in Chief at TradingMarkets.com.