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

https://mapsignals.com/contact/

 

Best ETFs for 2022

Despite the S&P 500 rising, Big Money has been selling more than buying in December. Going to MAPsignals.com, we can scan Big Money ETF Buys and Sells. Recent big selling, indicated by the deep red lines in the chart below, led to choppy markets. But the selling shrank to practically nothing in late December. When selling dries up, it’s a bullish sign.

Source: www.mapsignals.com

Long-term investors should 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 ETF opportunities for 2022.

#1 iShares Semiconductor ETF (SOXX)

Semiconductor stocks had a good year overall. Big Money has been buying SOXX in chunks for most of 2021. Considering semiconductors’ widespread use and scarcity, it makes a lot of sense.

Below you can see the Big Money buys for SOXX:

SOXX holds several solid stocks; one example is Broadcom, Inc. (AVGO). Here are Big Money signals for AVGO:

#2 iShares Russell 1000 Growth ETF (IWF)

This ETF is all about growth. IWF holds some of the largest stocks out there – big, well-known names. There were washouts around March and October (red bars), but look closely and you’ll see how big dips have preceded big rises:

One great stock IWF holds is Microsoft Corporation (MSFT). It’s a long-time Big Money favorite with awesome fundamentals. As the multi-year chart below shows, it’s been a monster stock for years:

#3 Vanguard Dividend Appreciation Index Fund ETF Share (VIG)

Dividend stock exposure is part of a diversified portfolio, and VIG is sort of a “best of” ETF of dividend-paying stocks. The companies it contains are huge, household names across many industries. It’s been a solid performer all year:

One of many big winners within VIG is Abbott Laboratories (ABT). It’s an outlier stock that pays a huge dividend:

#4 Invesco NASDAQ Next Gen 100 ETF (QQQJ)

The first three ETFs were from the stronger part of my ranked list. Now we look for bargains by identifying weaker ETFs holding stocks with strong fundamentals. QQQJ fits the bill. It’s been under lots of recent selling pressure. Near-term weakness can be an opportunity:

One winner within this ETF is Fortinet (FTNT). Big Money loves it. The multi-year chart says don’t bet against it:

#5 ARK Next Generation Internet ETF (ARKW)

This pick is from the “bargain bin,” but don’t let that throw you off to its potential in 2022 and beyond. Many ARK funds have been under pressure, ARKW included. While it has fallen significantly, ARKW holds great companies that are a big part of the business world. So, it could be a potential outlier.

One great stock in ARKW is Block Inc Class A (SQ), formerly known as Square. It’s been hit hard lately, but Big Money has shown interest in SQ because of its solid fundamentals. Given the firm’s future focus, I’m a believer that it could thrive (as it has since Big Money dove in):

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 great opportunity
  • Repeated buying usually means outsized gains

Let’s summarize here:

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SOXX, IWF, and VIG rank high. QQQJ and ARKW, however, rank lower on our list, due to weaker technicals. That’s why I think these weaker ETFs represent great potential bargains.

The Bottom Line

SOXX, IWF, VIG, QQQJ, and ARKW are my top ETFs for 2022. Sticking with quality funds holding top stocks is a winning recipe long-term.

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

Disclosure: the author holds no positions in SOXX, IWF, VIG, QQQJ, ARKW, AVGO, MSFT, ABT, FTNT, or SQ in managed or personal accounts at the time of publication.

Investment Research Disclaimer

https://mapsignals.com/contact/

 

iShares Semiconductor ETF is Still a Strong ETF Despite Recent Dip

There is an ongoing shortage of chips in the world, and that has affected the performances of numerous semiconductor manufacturers. This has also affected the performance of funds tracking these stocks.

SOXX Underperformed in Recent Days

The iShares Semiconductor ETF (SOXX) has been around since 2001 and is a smart beta exchange-traded fund. The fund provides investors with a broad exposure to the technology ETFs category of the US equity market.

SOXX is managed by BlackRock and has more than $9 billion in assets under management, making it one of the biggest funds in the Technology sector. Before fees and expenses, SOXX is designed to match the performance of the PHLX SOX Semiconductor Sector Index.

The PHLX SOX Semiconductor Sector Index, on the other hand, measures the performance of the US stocks involved in the semiconductor business. SOXX invests 100% of its allocation in the information technology sector. When you look at its portfolio, its biggest holding is Nvidia Corp (NVDA), which accounts for nearly 9% of the portfolio. The other two leading holdings include Broadcom Inc. (AVGO) and Intel Corporation Corp (INTC).

SOXX has underperformed in recent days, thanks to the poor performance of the broader market. During Friday’s trading session, the ETF lost more than 2% of its value and is currently trading above $518 per share.

SOXX Could Rally Higher Soon

Despite the recent decline, SOXX remains a strong semiconductor-focused ETF. Year-to-date, SOXX is up by more than 37%, outperforming numerous funds in this sector. The fund has traded between $352.32 and $537.71 in this past 52-week period.

SOXX ETF chart. Source: FXEMPIRE

SOXX’s MACD is above the neutral zone, indicating that the fund is very bullish at the moment. The fund is trading way above its 50-day moving average of $478, showing that it has strong support around the $500 level. The RSI of 63 shows that SOXX is heading into the overbought territory.

SOXX is a cheap fund because it has an annual operating expense of 0.43%. The ETF has a 12-month trailing dividend yield of 0.59%. Despite that, its beta of 1.16 and standard deviation of 35.02% for the trailing three-year period makes the fund a high-risk choice in the semiconductor space.