3 Stocks in 3 Sectors to Buy Before They Break Out

stocks to buy - 3 Stocks in 3 Sectors to Buy Before They Break Out

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Despite Friday’s stock slide, all-time highs remain a stone’s throw away. So until we see more substantial deterioration like support breaks and reversal patterns, it’s unwise to bet against the bull. Today’s gallery will offer up three stocks to buy right now.

The recurring theme tying these beauties together is simply a low-risk entry created by a compelling chart pattern. They come from different sectors which offer a diversified list of choices. One is a video game maker, one is an oil company, and one is a Chinese internet stock.

By moving outside of a single sector, we’ve increased the chances of finding a stock that performs well regardless of where the money flows this week or which area leads.

Enough with the preamble, on to the picks. Here are three of the best stocks buy this week.

Activision Blizzard (ATVI)

Source: ThinkorSwim

Last month Activision Blizzard (NASDAQ:ATVI) shares finally departed their nine-month trading range. The breakout both completed and confirmed a bottoming pattern and signaled the beginning of a new bull market. Thus far, the price action has been very constructive. Pullbacks have been extremely shallow, showing persistent buying pressure beneath the surface.

The past week of sideways action has allowed ATVI to digest recent gains and build a base to launch from during its next ascent. With the 20-day moving average fast approaching, the start of its next rally is imminent.

Implied volatility is extremely low at 34% or the 10th percentile of its one-year range. That suggests long premium plays are the way to go. A bull call diagonal spread looks particularly good here.

Buy the Jan $52.50 call and sell the Oct $57.50 call for a net debit of $4.80.

Hess Corp (HES)

Source: ThinkorSwim

Last week’s oil spike lit a fire under energy stocks, sparking a breakout in many names. And the profit-taking seen since then has returned them to attractive entry points. Hess Corp (NYSE:HES) is one of the best looking ones in the sector.

Monday’s surge vaulted HES stock above a six-month resistance zone amid heavy accumulation. The ensuing retracement has returned it to old resistance creating a potential low-risk entry. The 20-day moving average is also rising beneath and likely to provide some support.

If HES can trade above Friday’s high of $66.63, then consider deploying bullish trades. The low implied volatility makes bull call spreads an interesting bet. Buy the Nov $65/$70 bull call spread for around $2.15.

3 Stocks to Buy Right Now: JD.com (JD)

Source: ThinkorSwim

JD.com (NYSE:JD) shares are flirting with an upside breakout of their seven-month trading range. And that has traders around the Street perking up. Resistance at the $32 zone is thus far holding firm, but if the bull market rolls on I suspect the ceiling will be smashed in short order.

This year’s rebound in JD stock has allowed the 200-day moving average to bottom out and turn higher finally. The 50-day and 20-day moving averages are also pointing north. When $32 breaks is anyone’s guess, but I suggest being prepared with a trade, so you don’t miss out.

Today’s theme of low implied volatility continues with JD suggesting buying options is smart. Buy the Dec $30/$35 bull call spread for around $2 to $2.30 if the stock pops above $32.

As of this writing, Tyler Craig held bullish positions in ATVI. Check out his recently released Bear Market Survival Guide to learn how to defend your portfolio against market volatility.

Article printed from InvestorPlace Media, https://investorplace.com/2019/09/3-stocks-in-3-sectors-to-buy-before-they-break-out/.

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