Buy on the Dip Prospects: October 6 Edition

Below is a look at ETFs that currently offer attractive buying opportunities.The ETFs included in this list are rated as buy candidates for two reasons. First, each of these funds is deemed to be in an uptrend based on the fact that its 50-day moving average is above its 200-day moving average, which are popular indicators for gauging long-term and medium-term trends, respectively.Second, each of these ETFs is also trading below its five-day moving average, thereby offering a near-term ‘buy on the dip’ opportunity, given the longer-term uptrend at hand. Note that this prospects list also features a liquidity screen by excluding ETFs with average trading volumes below the one million shares mark. As always, investors of all experience levels are advised to use stop-loss orders and practice disciplined profit-taking techniques.To get access to all ETF Database premium content, sign up for a free 14-day trial to ETF Database Pro.78 ETFs made it to the list of buy on the dip prospects this month. The market closed in the red amid rising inflation and commodity prices, as well as China concerns and the Fed tapering its bond-buying program.This month’s buy on the dip prospects’ list was topped by Direxion Daily Financial Bull 3X Shares (FAS A-) as the financial sector lost more than 2% in the last month. Financial Select Sector SPDR Fund (XLF A) also made it to the list.Direxion Daily Technology Bull 3X Shares (TECL B+) also made it to the list as the technology sector fell by over 6% in the last month. Direxion Daily Semiconductor Bull 3X Shares (SOXL B) was one of the buy on the dip contenders as the semiconductor segment fell by 5%+ during the same time. Technology Select Sector SPDR Fund (XLK A) and VanEck Vectors Semiconductor ETF (SMH A-) also made it to the list.Consumer Discretionary Select Sector SPDR Fund (XLY A) was one of the buy on the dip candidates as the consumer discretionary sector lost over 2% in the last month.SPDR Dow Jones Industrial Average ETF (DIA A-) featured on the buy on the dip prospects list as the industrials segment fell by more than 6% in the last month.Both healthcare and biotechnology sectors also suffered a blow registering declines of 5%+ and 7%+ in the last month. As a result, Health Care Select Sector SPDR Fund (XLV A) and iShares Nasdaq Biotechnology ETF (IBB B+) featured on this month’s buy on the dip list.Many bond ETFs such as Schwab U.S. TIPS ETF (SCHP A), iShares TIPS Bond ETF (TIP A), SPDR Bloomberg Barclays Short Term High Yield Bond ETF (SJNK A) and SPDR Bloomberg Barclays High Yield Bond ETF (JNK A+) also made it to the list of buy on the dip prospects amid rising inflation and slow growth. Compare and contrast the two financial ETFs using our “ETF Comparison tool”: corporate bond ETFs like iShares iBoxx $ High Yield Corporate Bond ETF (HYG A) and Deutsche X-trackers USD High Yield Corporate Bond ETF (HYLB) featured on the list of buy on the dip prospects as investors become increasingly concerned about corporate earnings in the backdrop of supply chain concerns and rising material and labor costs.To compare this month’s list with the one published on September 8, click here.ETFs to Buy on the DipPlease note that this list is updated on a monthly basis.For more ETF analysis, make sure to sign up for our free ETF newsletter.Disclosure: No positions at time of writing.

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