‘Buy The Dip’ Investors Pile Into These 6 Stocks For Fast Gains
[S&P 500: ‘Buy The Dip’ Investors Pile Into These 6 Stocks For Fast Gains | Investor’s Business Daily](https://www.investors.com/etfs-and-funds/sectors/sp500-buy-the-dip-investors-pile-into-these-stocks-for-fast-gains/?src=A00220)
* [**MATT KRANTZ**](https://www.investors.com/author/krantzm/)
* 08:00 AM ET 07/21/2021
S&P 500 investors are bravely buying dips [**following sell-offs like never before**](https://www.investors.com/etfs-and-funds/sectors/sp500-how-investors-scored-billions-in-the-five-day-stock-sell-off/). And they’re showing some of their [**favorite stocks to scoop up**](https://get.investors.com/leaderboard/leaderboard-10-year/).
Six stocks in the S&P 500, including industrial plays **Dover** ([**DOV**](https://research.investors.com/quote.aspx?symbol=DOV)) and **Teledyne Technologies** ([**TDY**](https://research.investors.com/quote.aspx?symbol=TDY)) plus [**tech stock**](https://www.investors.com/market-trend/nasdaq-composite-index/) **PTC** ([**PTC**](https://research.investors.com/quote.aspx?symbol=PTC)), surged more than 3% from their 50-day moving averages Tuesday. And that’s after all these S&P 500 stocks fell this week to just 1% from their 50-day — or even dropped below it.
The 50-day moving average is a widely watched [**price level at which stocks seek support**](https://www.investors.com/how-to-invest/investors-corner/what-is-the-21-day-exponential-moving-average/) before falling more. And all these S&P 500 stocks highlight how investors continue to brazenly buy stocks — even after they sell-off to near or even below this key level. And that “buy-the-dip” mentality is running the entire S&P 500.
“The S&P 500 has shown exceptional resilience this year in bouncing whenever it has tested its 50-day moving average,” says Bespoke Investment Group.
**The Amazingly Resilient S&P 500**
Already this year, the S&P 500 closed below its 50-day moving average four times, Bespoke found. That’s roughly in-line with history. Typically it happens eight times annually, and we’re [**roughly halfway through the year**](https://www.investors.com/etfs-and-funds/sectors/sp500-these-6-stocks-turned-10000-into-59586-in-6-months/).
But here’s the interesting part that shows how “buying the dip” is in vogue. In just one week following the S&P 500 falling below its 50-day moving average each time this year, it gained 3.95% on average.
That’s an astounding level of bounce back. Historically, the S&P 500 only inched up 0.06% in the week after dropping to the 50-day moving average since 1945. And this year’s average one-week bounce back ranks No. 1 for any year since at least World War II, Bespoke says.
And it’s not just a short bounce either. Following its drops below the 50-day moving average this year, the S&P 500 was 5.7% higher, on average, a month later. That’s much higher than the S&P 500’s typical 0.54% rise following drops to below the 50-week moving average going back to 1945.
But what kinds of [**stocks bounce back?**](https://www.investors.com/etfs-and-funds/sectors/sp-500-companies-to-soon-post-blowout-1000-profit-growth/)
**Looking At This Week’s S&P 500 Sell-Off**
Monday’s sell-off didn’t quite knock the S&P 500 below its 50-day moving average at the close. The S&P 500 hit the 50-day and bounced intraday.
But a look at how some individual stocks behaved gives a taste of what buy-the-dip investors are doing now. Take Dover, a maker of a variety of industrial parts and supplies. Shares were up more than 20% this year up until the sell-off on Monday. The stock then slid to just 1% above its 50-day line. But that [**lured in the dip buyers**](https://www.investors.com/etfs-and-funds/sectors/meme-stocks-billion-gone-meme-stock-crash-wipes-out-gains/), who pushed shares up 7.7% from the 50-day moving average.
Investors also like to think of S&P 500 tech stocks as buy-the-dip plays. But this week’s example isn’t a household name. PTC, a tech firm that helps companies upgrade their operations, Monday dropped to just 1% above its 50-day moving average, but since then it’s blasted nearly 6% from that key support level.
Even some S&P 500 stocks that closed below their 50-day lines bounced in a big way. Teledyne Technologies actually ended Monday 0.4% below its 50-day moving average. But on Tuesday, it already sprung up more than 3% from the 50-day.
Just don’t assume this buy-the-dip mentality will last forever. [**Savvy investors know to monitor other key market indicators, too.**](https://www.investors.com/ibd-university/find-evaluate-stocks/)
“While the S&P 500’s ability to repeatedly bounce at its 50-day moving average this year has been impressive and even historic, enjoy it while it lasts,” Bespoke says. “We can guarantee that it won’t last forever.”
**S&P 500’s Bounceback Kids**
*All jumped 3% or more from 50-day moving averages after falling to 1% or less of the support level on Monday*
[ Sources: IBD, S&P Global Market Intelligence](https://preview.redd.it/r9el3ww0ulc71.png?width=803&format=png&auto=webp&s=e9815aec4b3919af7bdf3d2a6609a7a3f113aecf)
https://www.reddit.com/r/StockMarket/comments/oov9t2/buy_the_dip_investors_pile_into_these_6_stocks/