With equities in overbought territory, last week’s pause was just the ticket some were looking for.
Consolidation following a rousing rally allows numerous stocks to build bases for potential breakout trades, or stock dips for low-risk entries. Today’s tasty morsels are offering up the latter.
The beauty of a pullback is it brings prices closer to support zones. And if you place your stop loss below said floor your risk is minimal.
Enough with the preamble. On to the picks.
Behold three buy-worthy stock dips you should consider.
3 Buy-Worthy Stock Dips: Union Pacific Corporation (UNP)
Union Pacific Corporation (NYSE:UNP) kicks us off with a beaut of an uptrend. After descending all last year, UNP stock bulls finally halted the slaughter in January, and they’ve dominated ever since. The price rise has been sufficient in turning the 20-day and 50-day moving averages higher. The turn in the slow moving 200-day is a comin’.
Friday’s bullish engulfing candle should be of particular interest to UNP stock lovers. The strong rise represented a stellar bounce back from Thursday’s earnings-induced drop. Watch for a breach of Friday’s high to trigger you into bullish trades.
Option enthusiasts could consider buying Sep $90 calls.
3 Buy-Worthy Stock Dips: Nike Inc (NKE)
Our next buy-worthy stock dip is Nike Inc (NYSE:NKE). Nike stock’s slide was arrested last month by its quarterly earnings announcement. Nothing like better-than-expected profits to kick-off a turnaround.
NKE stock’s post-earnings ramp was sufficient in turning the 20-day moving average higher. Much work remains before the 50-day and 200-day averages follow suit. So consider the current stock dip your opportunity to enter Nike at the ground floor of what could be a new uptrend.
Last week’s drops has ushered NKE shares to the rising 20-day moving average. Watch for a pop above $57.20 to signal a new upswing is commencing. Consider snatching up shares or the Sep $55 call.
3 Buy-Worthy Stock Dips: Lululemon Athletica Inc. (LULU)
Lululemon Athletica Inc. (NASDAQ:LULU) rounds us out with the best-looking trend of the bunch. She’s been stretching higher all year long. Last week’s four-day descent created one of the cleanest pullbacks of its entire trend. Unlike its predecessors, LULU stock’s long-term trend is rising, suggesting the bulls are in control on all time frames.
It doesn’t get any better than that.
If Lululemon can pop above Friday’s high, consider buying shares. Or, if you prefer the more leveraged route, grab the Sep $75 calls.
At the time of this writing Tyler Craig had no positions in any of the aforementioned securities.
