Dip Buyers Delight: Consider These ETF Pullback Choices

Despite a solid rally by the broader market over the past three trading days, concerns remain in both the fundamental and technical camps that more declines may be on the way. Only time will tell if that proves to be the case, but in the here and now there are more than a few ETFs that traders and long-term investors might want to have a look as buy-on-the-dip candidates. In composing this list, we evaluated ETFs that are volatile enough to notch good near-term percentage moves to satisfy active traders along with some funds that are trading far enough off their recent highs that they offer some value to investors with longer time horizons. Here are five pullback candidates that traders and investors can cozy up to in the current market environment. 1) iShares Dow Jones US Oil Equipment Index Fund IEZ: Between National Oilwell Varco NOV signing $1.5 billion in Brazilian contracts and Transocean RIG announcing its biggest acquisition in four years, the last 24 hours have shown there is still plenty to be bullish about when it comes to the oil services sector. IEZ is the ideal mix of potential for rapid short-term gains and value for the patient investor as the ETF is currently trading more than 17% off its 52-week high. 2) Market Vectors Rare Earths/Strategic Metals ETF REMX: Parse through the recent earnings statement from Molycorp MCP, one of the bellwether rare earths names, and you'll find that despite the recent decline in global equity prices, the rare earths song remains the same. High demand, high prices and crimped supplies. Trading around $22, REMX could offer 10% upside or more in the near-term. Long-term holders could ride REMX to the high 20s/low 30s if market sentiment dramatically changes for the better. 3) Consumer Staples Select Sector SPDR XLP: XLP offered little in the way of shelter from the recent market storm, but the sunny side of that scenario is that this low-beta ETF could be offering savvy investors up to 10% upside from current levels. Obviously a better bet for investors rather than active traders. 4) Global X FTSE ASEAN 40 ETF ASEA: For a few days at least, ASEA looked like it was trying to fight off the market's downward pressure, but the new ETF eventually succumbed to the move away from emerging markets fare. If ASEA can reclaim its 50-day moving average at $16.50, it should be able to mount another challenge of its all-time around $17.50. Perhaps one of the more intriguing emerging markets ETF rebound candidates. 5) iShares Nasdaq Biotechnology ETF IBB: Select health care stocks and ETFs are still clinging to their 2011 gains and some even performed “less bad” during the recent downdraft. IBB wasn't among the “less bad” group, but trading around $93 with support firm at $85, the risk/reward is favorable here assuming IBB returns to the $110 area. Exchanging $17 of upside for $8 of downside is a pretty good deal, right?