3 Booming Tech Stocks to Buy

tech stocks - 3 Booming Tech Stocks to Buy

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Tech stocks were red-hot Tuesday with many heavy hitters leaping to 52-week highs. The largest companies are leading the way, continuing their trend of relative strength versus small-caps. At its intraday peak, the Nasdaq 100 was up over 4%.

In today’s gallery, we’re dissecting the boom and highlighting three of the best tech stocks to buy if you want to capitalize.

We could point to all sorts of indicators that underscore the Nasdaq’s return to health, but perhaps the simplest is the 50-day moving average. The rally Tuesday carried the tech-heavy index back above this line for the first time since the crash began. And it’s the first index to do so. The S&P 500, Dow Jones, and Russell 2000 are still stuck on the south side.

Many of the Nasdaq’s top holdings are attractive picks, but these three might be the best:

  • Amazon (NASDAQ:AMZN)
  • Netflix (NASDAQ:NFLX)
  • Apple (NASDAQ:AAPL)

Let’s take a closer look at each one and identify why they’re worth buying.

Tech Stocks to Buy: Amazon (AMZN)

Tuesday’s gain: 5.3%

Source: The thinkorswim® platform from TD Ameritrade

The snapback in Amazon has been incredible, especially for being one of the largest companies on the planet. This isn’t some small biotech stock. From February’s peak, the e-commerce giant fell 26% before finally finding a bottom at $1,626. By comparison, the Nasdaq-100 ETF fell 30%.

Relative strength on the way down has been followed by some serious muscle-flexing on the way back up. AMZN stock is now 40% off the lows and closed at a record high. This has come, mind you, while many stocks remain lost in bear country.

Once the initial knee-jerk liquidation on coronavirus fears ended, logic demanded Amazon return to its heights on the heels of unprecedented demand for its products and services. And return it has.

If you’re afraid to chase after such a powerful two-day rally, I don’t blame you. But sometimes you have to pay up for exposure if you don’t want to get left behind. Either way, Amazon belongs on the top of your buy list.

Netflix (NFLX)

Tuesday’s gain: 4.24%

Source: The thinkorswim® platform from TD Ameritrade

The narrative for Netflix is similar to Amazon. Its shares weren’t spared during the initial stage of the crash, but once cooler heads prevailed, it was one of the first to recover. Like Amazon, Netflix offers a service that benefits from the social distancing and quarantine trend. Its monthly cost is low enough to make it one of the last things cash-strapped consumers would cancel.

After the initial plunge, the selling pressure has been well contained and volume patterns show a clear bullish trend. Multiple accumulation days litter the landscape with the biggest buying binge coming over the past two days. The groundswell in participation adds legitimacy to the breakout, making it unlikely it fails.

Earnings loom on April 21 and could throw a wrench into its otherwise glorious chart. I doubt it will, but if you’re uncomfortable braving the drama, then skip this trade and revisit Netflix after the event.

For everyone else, bull calls offer an attractive payout if the rally continues.

The Trade: Buy the May $420/$430 bull call spread for around $4.40.

Apple (AAPL)

Tuesday’s gain: 5.05%

Source: The thinkorswim® platform from TD Ameritrade

As one of the largest holdings in the Nasdaq-100, it shouldn’t be surprising that among tech stocks, Apple’s price chart mirrors the Index. Today’s rip carried AAPL back above its 50-day moving average alongside the Index. And with that potential resistance area now out of the way, the tech titan is set for a push toward $304.

An unfilled gap and resistance pivot sit in that area, making it an obvious target for the current advance. Tuesday’s volume suggests institutions were entering the fray in a big way and should embolden spectators looking to take a bite.

On the fundamentals side, Apple has one of the best balance sheets on the planet with mountains of cash available to weather the economic fallout of the pandemic. That should provide buyers peace of mind in case the market rally falters.

The Trade: Buy the May $290/$300 bull call spread for around $4.50.

For a free trial to the best trading community on the planet and Tyler’s current home, click here! As of this writing, he did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media, https://investorplace.com/2020/04/3-booming-tech-stocks-to-buy/.

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