Best Oversold ETFs to Buy Now for March 2022

When looking at Big Money ETF buys and sells below from MAPsignals.com, the deep red bars on the right side of the chart reflect the recent selling. In fact, this is the most ETF selling we’ve seen since the COVID-19 pandemic hit markets hard in March 2020:

Source: www.mapsignals.com

When markets move like this, the hysteria can entrap great assets and cause them to be sold off. To identify those “unfairly hit,” long-term investors need to look for ETFs (and their stocks) with great setups.

Remember: ETFs are just baskets of stocks, so we need to look at them in detail. MAPsignals specializes in scoring more than 6,500 stocks daily. If I know which stocks compose the ETFs, I can apply stock scores to the ETFs. Then I can rank them all from strongest to weakest.

Let’s get to the five best oversold ETFs to buy for March 2022.

#1 Consumer Discretionary Select Sector SPDR Fund (XLY)

This ETF has been getting hammered this year. That isn’t surprising given the overall growth slide and other headwinds. XLY has been caught in the flood. But Big Money has been buying XLY in chunks over the last year:

Despite the recent decline, XLY holds several solid stocks. One example is its second-largest holding, Telsa Inc. (GOOGL). Here is the Big Money action on GOOGL since 2017 – look at that rise:

#2 Vanguard Information Technology ETF (VGT)

When there are unusually big sells on otherwise fundamentally strong ETFs, it’s usually a time to buy. That could be the case now with VGT. It holds some of the biggest, most successful tech stocks out there. Their ability to bounce back is appealing, as is the growth of VGT:

One great stock among the VGT top holdings is NVDIA Inc. (NVDA). It’s a long-time Big Money favorite with awesome fundamentals, as the multi-year Top 20 chart below shows:

#3 iShares U.S. Home Construction ETF (ITB)

If you want to ride the U.S. housing wave, ITB is a reliable vehicle. Big Money likes this construction ETF because it holds tremendous housing stocks. Given its quality, I think this could be a great opportunity to get a solid ETF at a discount price:

The largest holding within ITB is D.R. Horton, Inc. (DHI). It’s an outlier stock that has been a Top 20 Big Money buy many times since 2015:

#4 iShares Semiconductor ETF (SOXX)

Semiconductors are in pretty much everything modern humans use daily, and they’re in short supply right now, so demand should be strong for a while. SOXX is full of solid growth companies under selling pressure and could be an opportunity:

One company within this ETF that’s been uneven but could still flourish is Qualcomm Inc. (QCOM). Big Money loves it. The multi-year QCOM chart of Big Money activity says don’t bet against it:

#5 First Trust Cloud Computing ETF (SKYY)

This ETF has been dropping since November 2021, but it still has lots of potential. SKYY holds solid companies focused on a critical business need with big growth potential. So, it may still be an outlier.

One great stock in SKYY is Alphabet Inc. Class A (GOOGL), Google’s parent company. Like many tech stocks, it’s fallen back lately, but it still has a phenomenal long-term trend and is SKYY’s top holding. Looking at the Top 20 buys, it’s clear Big Money has loved GOOGL since it began trading:

Here’s a Big Money recap:

  • When Big Money buying pours in, stocks tend to go up
  • Red selling on great quality can be a tremendous opportunity
  • Repeated buying usually means outsized gains

Fair or not, all these ETFs have been hit hard this year due to their growth-oriented focus. But that doesn’t change the fact they hold great stocks that could rise in the future. That’s why I think these oversold ETFs represent great potential bargains.

The Bottom Line

XLY, VGT, ITB, SOXX, and SKYY are my best oversold ETFs to buy now for March 2022. These picks are poised to do well going forward, in my opinion, largely because they each hold great stocks. They may be experiencing selling pressure, but on quality assets, deep red days often prove to be fire sales over time.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: at the time of publication, the author holds no positions in XLY, VGT, ITB, SOXX, SKYY, TSLA, NVDA, or DHI, but does have long positions in QCOM and GOOGL in managed or personal accounts.

Investment Research Disclaimer

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BTC iShares U.S. Home Construction ETF Targets $85 Ahead of 2022

The infrastructure sector of the United States stock market has performed excellently this year as President Biden focuses on rebuilding the country.

ITB has had an Excellent Year

The BTC iShares U.S. Home Construction ETF (ITB) is one of the best-performing funds in its sector so far this year. Over the past few months, the fund has added more than 40% to its value, outperforming numerous funds in the sector.

ITB is a passively managed exchange-traded fund that has been around since 2006. It is managed by Blackrock and has more than $3 billion in assets under management, making it one of the largest ETFs attempting to match the performance of the Industrials – Engineering and Construction segment of the U.S. stock market. Before fees and expenses, the fund is designed to match the performance of the Dow Jones U.S. Select Home Construction Index.

Meanwhile, the index it tracks is a subset of the Dow Jones U.S. Household Goods Index. The Dow Jones U.S. Select Home Builders Index is a free-float adjusted market capitalization-weighted index that measures the performance of the home construction sector of the U.S. stock market.

The fund invests heavily in the Consumer Discretionary sector as it accounts for 78% of its portfolio. Industrials and Materials make up the top three.

ITB Could Hit the $85 Mark Soon

Following its rally since the start of the year, the BTC iShares U.S. Home Construction ETF could rally towards the $85 mark over the coming days or weeks. The annual operating expenses for this ETF are 0.41, which is similar to most ETFs in this sector. Furthermore, the fund has a 12-month trailing dividend yield of 0.38%.

ITB’s RSI is heading towards the oversold region. Source: FXEMPIRE

ITB’s technical indicators show that the fund is currently performing excellently. The MACD line is well above the neutral zone, indicating a positive trend in its performance. The RSI of 61 shows that it is heading into the overbought region. At press time, ITB is trading above its 50-day moving average of $76.26

ITB has a beta of 1.42 and a standard deviation of 36.65% for the trailing three-year period. As such, it is a high-risk choice in the space.

iShares U.S. Home Construction ETF Reaches a New 52-Week High

The financial markets took a hit earlier this month, but exchange-traded funds (ETFs) continue to perform excellently. President Biden’s infrastructure plan has benefited numerous construction-focused stocks.

ITB Continues its Rally

The iShares U.S. Home Construction ETF (ITB) has been one of the best performing ETFs in its category in recent months. The fund has now hit a new 52-week high and could rally higher over the coming weeks.

The ETF tracks the performance of the underlying Dow Jones U.S. Select Home Builders Index, which is a subset of the Dow Jones U.S. Household Goods Index. The index is a free-float adjusted market capitalization-weighted index and measures the performance of the home construction sector of the U.S. stock market.

ITB has been rallying thanks to the increase in demand for new and existing homes in the face of increasing housing prices and supply-chain disturbances. As a result, home builders have benefited the most in this period. Interest rates have dipped on the Omicron variant of the COVID-19 fear.

ITB Could Rally Towards $90

At press time, ITB is trading at $80.89 per share, up by more than 2% during the previous trading session. The ETF has performed excellently since the start of the year, adding more than 45% to its value during that period. In the past month, ITB’s value has increased by more than 8%.

ITB’s technical indicators are very strong. Source: FXEMPIRE

ITB’s technical indicators are looking positive at the moment, thanks to the fund’s latest performance. It is trading above its 50-day moving average of $72.69, while the MACD line is way above the neutral zone and into the bullish territory. The RSI of 70 shows that ITB is heading into the overbought region.

The iShares U.S. Home Construction ETF could continue with its recent rally and reach the $90 mark over the coming weeks. Its performance would depend on the demand for housing and the state of the supply chain sector.