Buy on the Dip Prospects: May 20 Edition

Here is a look at ETFs that currently offer attractive short 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 medium-term and long-term trends, respectively.Second, each of these ETFs is also trading below its 20-day moving average, thereby offering a near-term “buy on the dip” opportunity given the longer-term uptrend at hand. Note that this 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 premium content, sign up for a free 14-day trial to Pro.Only 8 ETFs made it to the list of buy on the dip prospects this month. NASDAQ moved higher while the other two U.S. indices closed flat this month. NASDAQ has shown a sharp outperformance as compared to the other major indices as technology companies have seen a much lesser impact of the COVID-19 crisis as compared to the other sectors.Volatility ETFs like ProShares VIX Short-Term Futures ETF (VIXY A), iPath S&P 500 VIX Short-Term Futures ETN (VXX B+), ProShares Ultra VIX Short-Term Futures ETF (UVXY B-) and VelocityShares Daily 2x VIX Short-Term ETN (TVIX C+) topped the list of buy on the dip prospects as volatility declined. VIX, the CBOE Volatility index, dipped from near 40 to 32 during the month. After the sharp fall of indices in March, relative stability has led to a decline in the volatility. Compare and contrast the two volatility ETFs using our ETF Comparison tool.Several Treasury bond ETFs like iShares 1-3 Year Treasury Bond ETF (SHY A), iShares Short Treasury Bond ETF (SHV A-) featured on the buy on the dip prospects’ list. Bond prices have fallen due to prospects of falling economic growth as investors seek safety. iShares 20 plus Year Treasury Bond ETF (TLT B-) that tracks an index of debt issued by U.S. Treasury having maturities of 20 years or more, also made it to the list of buy on the dip prospects.To compare this month’s list with the one published on April 22, 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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