Buying the Deepest Stock Dips in 2016 Returned Three Times S&P 500
- A strategy of trading ‘oversold’ shares is up 28 percent
- Stock market resilience has led to multiple S&P 500 rebounds
Buy the Dip: A Strategy for Trading 'Oversold' Shares
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It’s been a great year for catching falling knives.
The buy-the-dip strategy that’s been a hallmark of the U.S. stock rally is outdoing itself in 2016, where buying stocks in the most extreme state of free fall is paying like rarely before. An index tracking shares in the Russell 3000 Index that register as “oversold” on a momentum metric is up 28 percent, according to data compiled by Bloomberg.