Today’s green open shows Friday’s whack might have been a one-off. To celebrate the potential for the bulls’ return, today’s gallery looks at three stocks to buy.
Buyers gorged on gains going into Thanksgiving. They were so stuffed that sellers finally came out to play on Black Friday. The drop was well deserved and did little to change the upward trajectory of the market’s march. Sure, it signaled the potential end of the upswing or at least its transition to a consolidation phase, but both are common developments in a healthy uptrend.
Bottom line: Bulls maintain the upper hand and until support gives way, traders should view weakness as a buying opportunity. And speaking of buying, my weekend scanning has revealed three of the best stocks to buy right now. Rather than banking on a single sector, I’m offering up a diversified list that includes three different industries to increase the chances that at least one of these beauties receives some love this week and delivers profits to you.
Enough with the appetizers and on to the main course. Here are three of the best stocks to buy now.
Best Stocks to Buy Now: Starbucks (SBUX)
Starbucks (NASDAQ:SBUX) has been one of the best trending stocks on the Street this year. Its eight-month uptrend that topped out in August created numerous bullish opportunities along the way. And the downtrend that has since developed has seen several clean bearish patterns.
But a quick analysis of its weekly and daily time frame reveals a compelling bottoming pattern signaling SBUX stock is finally ready to rise again.
First, the weekly shows a bull retracement pattern. Second, the daily chart flashed slowing momentum at the rising 200-day moving average and an upside breakout. The resistance breach is the first bullish victory since the downtrend began in August.
The Trade: Options are cheap, making long call spreads a low-risk bet here. Buy the Jan $85/$90 bull call spread for around $1.85. Wait for a break of today’s high to trigger.
Pan American Silver (PAAS)
Pan American Silver (NASDAQ:PAAS) shares are on the mend. Since bottoming at $10.26 in May, PAAS stock has almost doubled in value. The ascent has provided multiple breakouts and retracement patterns, delivering smile-inducing profits to traders. Its latest pattern is a cup-and-handle formation that is on the verge of completion.
Friday’s pop pushed the stock directly into resistance, and I think an upside break is imminent. The next ceiling isn’t until $21, so there is plenty of room for PAAS to run higher if the current resistance gives way.
The Trade: If the stock breaks above Friday’s high ($19.34), then sell the Jan $18 put.
Advanced Micro Devices (AMD)
Since its meteoric ascent finally peaked at $41.79, Advanced Micro Devices (NASDAQ:AMD) has been quietly pulling back. The selling has been contained and orderly thus far suggesting garden variety profit taking and nothing more. The low volume supports an optimistic view of the shallow retreat.
The 20-day moving average is also quickly catching up and could signal buyers’ imminent return. Strong trends usually see buyers emerge at this level.
Implied volatility is at the lower end of its range, but remains high enough to make naked puts an exciting proposition. We can create a high probability of profit, so you profit whether AMD stock rises, stagnates or even falls a bit further from here.
The Trade: Sell the Jan $35 put for around 80 cents.
As of this writing, Tyler Craig held bullish positions in AMD. For a free trial to the best trading community on the planet and Tyler’s current home, click here!