The dastardly selling deluge is finally coming to an end … at least in the short-run. And that means it’s high time to snatch up a few stocks to capitalize on the coming rebound.
Those seeking stocks to buy should take a good look at the tech space. The Nasdaq Composite has handed the leadership role to mega-caps in recent days, but a handful of blue-chip tech stocks look ripe for a rebound.
There really isn’t much overhead resistance in the PowerShares QQQ Trust, Series 1 (ETF) (QQQ) until the 200-day moving average at $109, so we could easily see 4.5% upside from here before sellers materialize in force. Given the severe level of deterioration over the past few weeks, the coming bounce is indeed suspect … but that doesn’t mean we can’t capitalize on the strength, however fleeting it may be.
There are a number of blue-chip tech stocks to buy as they get caught up in the recovery efforts, but these three top the list.
3 Blue-Chip Tech Stocks to Buy: Alphabet Inc (GOOGL)
The first bounce-worthy blue chip is Alphabet (GOOG, GOOGL). Sure, it has gotten caught up in the selling frenzy, but mildly so. See, GOOGL stock remains a far cry above its 200-day moving average, suggesting its long-term uptrend is firmly intact.
Relative strength has been its watchword during the swoon. While the Nasdaq Composite is down some 10%, GOOGL stock has only fallen 8%.
What’s more, unlike the broader market, Google stock’s pullback hasn’t seen a massive surge in volume, suggesting selling pressure has been muted.
3 Blue-Chip Tech Stocks to Buy: Amazon.com, Inc. (AMZN)
Next on our list is the king of retail: Amazon (AMZN). Its price action is eerily similar to GOOGL stock. These two tech stocks have been fast friends, and even the ongoing market liquidation hasn’t been able to shake their relationship.
But don’t take my word for it. The correlation coefficient for AMZN stock and GOOGL has pinned right near +1 for four months now, which means statistically, these guys have been moving in the same direction day-after-day with extreme consistency.
The bounce attempt began for Amazon on Monday. Buyers emerged, delivering a classic-looking bullish reversal candle, the bullish harami. Look for follow-through in AMZN stock in the coming days.
3 Blue-Chip Tech Stocks to Buy: Apple Inc. (AAPL)
Rounding out our trio is the beloved Apple (AAPL), but it’s undoubtedly the weakest of the bunch.
AAPL stock has followed the market into the abyss and sits a far cry from its all-time highs — 27% to be exact.
The appeal for a rebound in AAPL stock is simply due to its extremely oversold status. Like rubber bands, when stock prices stretch too far in one direction or the other, it’s a good bet that a snap-back is imminent.
Given the swiftness of Apple’s drop, it can rally a fair amount before running into any major overhead resistance. I think $106 is as good a target as any if buyers can push AAPL on the coming rebound attempt.
As of this writing, Tyler Craig did not hold a position in any of the aforementioned securities.