Sellers have just about lost every advantage gained during the early February crash. The technical deterioration has all but healed, and the distribution has all but dissipated. And volatility? Well, let’s just say complacency is returning almost as fast as fear first struck. If last week’s price action has your inner bull emboldened, then today’s selection of strong stocks to buy is worth consideration.
Friday’s broad market rally seems to have declared a victor to the battle of the 50-day moving average. The S&P 500 saw quite the tug-of-war around it throughout the entire week. Sellers have been hoping for another downswing and re-test of the crash lows near $2,550. And buyers have been fighting to avoid it. Based on the robustness of Friday’s rip, there’s no doubt bulls hold the upper hand here.
Many stocks have built bases and setup low-risk entries on the heels of the recent market chop. Here are three of the best stocks to buy for the week ahead.
Strong Stocks to Buy: Paypal Holdings Inc (PYPL)
Paypal Holdings Inc (NASDAQ:PYPL) shares had the wind taken out of their sails when the most recent earnings release failed to impress the Street.
Shareholders worried that this was the beginning of the end — the unraveling of PYPL’s monster gains — will be happy to note the stock has stabilized and is staging a technically sound recovery. With Friday’s pop, PYPL stock has now reclaimed the high ground above both its 20-day and 50-day moving averages. It’s now within striking distance of a gap fill and re-test of its all-time highs.
To further confirm Paypal’s sound footing, the MACD indicator just flashed a buy signal suggesting that momentum is officially backing the bulls here.
Buy the April $80 calls for $3.10.
Strong Stocks to Buy: Anadarko Petroleum Corporation (APC)
The energy sector has yet to reclaim its former glory, but that hasn’t stopped Anadarko Petroleum Corporation (NYSE:APC) from bouncing back like a champ. With Friday’s surge, APC stock now sits a stone’s throw from recent highs. The 200-day moving average is now curling higher, confirming the stock has now risen far enough to reverse the trajectory of its long-term trend.
The past month of choppy consolidation has built a base, which APC now appears poised to launch from. The MACD indicator is just now forming a buy signal, which should further bolster the bulls’ resolve.
Buy the April 60/65 bull call spread for $1.95.
Strong Stocks to Buy: Nike Inc (NKE)
The damage inflicted in Nike Inc (NYSE:NKE) shares during the crash was minimal and has fully healed. Last week’s jump off the 20-day moving average showed buying aggression is on the rise. And with this morning’s follow through, NKE stock has formed a small cup-and-handle pattern that is on the cusp of completion.
With NKE shares pennies from all-time highs and trekking higher above ascending moving averages across the board, there really isn’t any reason not to like the stock here.
Buy the NKE April $67.50/$72.50 bull call spread for $2.15.
As of this writing, Tyler Craig didn’t hold positions in any of the aforementioned securities. Want more education on how to trade? Check out his trading blog, Tales of a Technician.