3 Blue-Chip Tech Stocks to Buy on the Bounce

Advertisement

The S&P 500 has shot more than 10% higher from its Sept. 29 lows as investors have crowded in to “buy the dip.”

3 Blue-Chip Tech Stocks to Buy on the Bounce

Source: ©iStock.com/gunnar3000

Of course, the hindsight view of this short and violent rally now has a lot of traders crying “dead-cat bounce” as they expect the S&P 500 and other indices to plunge back to their lows, taking the suckers all the way back down with it.

Right now, the charts do suggest a high probability that we will trek back toward the August and September lows. However, a number of tech stocks look like they’re enjoying rallies that are far more than just a dead-cat bounce. No, these spry technical performers are ready to run despite the market weakness.

These three tech stocks to buy now are very live cats that should run higher soon.

Tech Stocks to Buy for the Bounce: Amazon.com, Inc. (AMZN)

Tech Stocks to Buy for the Bounce: Amazon.com, Inc. (AMZN)

Is Amazon (AMZN) the new retail leader of the world? Lower forecasts from Walmart (WMT) this week are almost surely to be caused by the constant pressure from the online retailing power of Amazon. Double-digit revenue growth (compared to WMT’s low-single-digit growth) has helped AMZN beat analyst expectations the majority of quarters over the past two years.

Fundamental strength has translated into strong charts as AMZN remains in a strong trend above its 50- and 200-day moving averages. This puts it in the top quarter of companies within the top 10% of the S&P 500 companies as ranked for technical strength.

Amazon is set to announce earnings next week. With heavy technical support below and little-to-nothing overhead, we expect a break above $560 to clear the way to a smooth climb to the $700 before year-end — a screaming 27% gain from here.

Tech Stocks to Buy for the Bounce: Intel Corporation (INTC)

Tech Stocks to Buy for the Bounce: Intel Corporation (INTC)

Semiconductor stocks have been in the lead the market from the bottom as evidenced by the SPDR S&P Semiconductor ETF (XSD) trading above its 200-day moving average. For the time being, the semis as a group are looking at potential for a 10% run higher.

At the lead of this subgroup of tech stocks is Intel (INTC), which is breaking into an intermediate-term bullish pattern. INTC stock is trading above its 200-day MA, with its 50- day preparing for a bullish “golden cross” above it, likely within the next month.

Intel shares are among the underappreciated performers identified by our models as the crowd continues to view INTC pessimistically. Low analyst buy ratings and relatively high short interest suggests that there is a large contingent of potential sellers out there to jump on the Intel bandwagon as its performance improves.

Tech Stocks to Buy for the Bounce: Alphabet Inc (GOOG, GOOGL)

Tech Stocks to Buy for the Bounce: Alphabet Inc (GOOG, GOOGL)

Call it what you want (most people are still calling it Google), but our models are calling for Alphabet (GOOG, GOOGL) shares to continue their leadership after experiencing only a shallow correction during the market’s recent fall.

Like AMZN, GOOGL is among the less than 20% of S&P 500 companies that are trading above intermediate- and long-term technical support. This rarefied air makes it easier for these companies to maintain their leadership in the market and profitable trends.

Some may complain that GOOGL is only up 9% from its Sept. 29 lows when there are other companies posting gains of almost 30%, aren’t those the real leaders? Nope, GOOGL shares’ rally will has brought it within 2% of its 12-month highs while the rest of the S&P 500 is an average of 31% from their relative 12 month highs. Grab this very live cat on these bounces.

More From InvestorPlace


Article printed from InvestorPlace Media, https://investorplace.com/2015/10/3-blue-chip-tech-stocks-to-buy/.

©2024 InvestorPlace Media, LLC