Buy on the Dip Prospects: May 11 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.24 ETFs made it to the list of buy on the dip prospects this month. All three market indices fell sharply after the Fed hiked interest rates last week.VanEck Vectors Oil Services ETF (OIH B+) topped the buy on the dip prospects’ list with more than 33% annual gains. Oil prices fell last month after IEA agreed on reserves release. Prices, however, gained last week as the EU is now considering a possible ban on Russian oil.SPDR S&P Metals & Mining ETF (XME A) ranked two on the list of buy on the dip prospects as the metals and mining sector fell by more than 12% last month.Utilities Select Sector SPDR Fund (XLU A) made it to the buy on the dip prospects list as the utility sector declined by more than 5% in the last month. The utility sector fell in a rising rate environment.Materials Select Sector SPDR Fund (XLB A) featured on the buy on the dip prospects list as the materials sector declined by ~3% in a rising rate scenario.Several dividend-focused funds such as iShares Core High Dividend ETF (HDV A-) and SPDR Portfolio S&P 500 High Dividend ETF (SPYD ) also featured on the list, falling by more than 8% and 6% respectively. Dividend funds have been a popular option for income-seeking investors as they look for higher yields and this dip could offer a good entry point for such investors. Typically, dividend-yielding stocks perform poorly as interest rates rise. Read more about the ETF of the week here.Many gold ETFs like iShares Gold Trust (IAU A), SPDR Gold Shares (GLD A-), and Sprott Physical Gold Trust PHYS ranked among buy on the dip contenders this month as gold prices fell on a strong US dollar and on an aggressive Fed stance to fight inflation. Compare and contrast the two gold ETFs using our ETF Comparison tool.To compare this month’s list with the one published on April 13, 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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