3 Diverse Tech Stocks to Buy That Are Breaking Out Now

tech stocks to buy - 3 Diverse Tech Stocks to Buy That Are Breaking Out Now

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If a market-leading Nasdaq Composite seems out of reach, you’re likely not alone in that feeling. Still, in a market made up of more than a few companies, other tech stocks are demonstrating leadership off and on the price charts. Let me explain.

Thank Apple (NASDAQ:AAPL). It feels like nothing can stop it, not even Covid-19. The world’s largest capitalization company is fetching a record-breaking $1.87 trillion these days. Its shares have also gained 49% in 2020 and 114% the past year. To say the least, Apple has been a beast. And it has heavily influenced the Nasdaq’s own exceptional historic gains of 22% of 40% respectively.

But Apple isn’t entirely alone in showing investors some extraordinary razzle dazzle either.

Fellow ginormous tech stocks Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN) have also made incredible returns over the same periods. And appreciably, the trio make up more than one-third of the Nasdaq. The combined valuation is also just over $5 trillion in market capitalization and a very sobering equivalent of Europe’s largest economy, Germany. It’s kind of scary, right?

Yet buying into leadership within technology doesn’t have to feel or look like investors are throwing caution to the wind.

  • Roku (NASDAQ:ROKU)
  • Broadcom (NASDAQ:AVGO)
  • First Solar (NASDAQ:FSLR)

Let’s look at three other leading companies within the broader universe of technology. On the price charts, these tech stocks are just now breaking out. I think they stand to enjoy a slightly less-risky wind at their back, rather than a more challenging law of large numbers headwind to increasingly battle against.

Tech Stocks to Buy: Roku (ROKU)

Roku (ROKU) monthly chart shows breakout of handle within large cup
Source: Charts by TradingView

The first of our tech stocks to buy is Roku. The over-the-top streaming device champ is shaping up within a large corrective pattern that has been roughly a year in the making. This week, shares have broken out marginally from a small handle consolidation situated high within the right side of the bigger base.

The constructive price action should lead to an eventual breakout of the cup and Roku’s all-time high. Moreover, with earnings out this evening, a catalyst to confirm the bullish pre-report price action and turn this $20 billion market leader into an even larger presence looks great and close at hand.

My recommendation for investors willing to accept earnings exposure is to buy the Sep $180/$195 bull call spread in lieu of owning shares, given its well-positioned, leveraged and reduced-risk characteristics.

Broadcom (AVGO)

Broadcom (AVGO) monthly breakout just underway
Source: Charts by TradingView

The next of our tech stocks to buy is Broadcom. Unlike peers Nvidia (NASDAQ:NVDA) or Advanced Micro Devices (NASDAQ:AMD), this semiconductor heavyweight hasn’t had the attention of the investors of late. And with much weaker gains of just 4% in 2020 and roughly 22% over the last 52 weeks compared to returns approaching 100% and 200% for NVDA and AMD over those same periods, it’s no wonder.

Make no mistake though, Broadcom is no Intel (NASDAQ:INTC) and its ready to rally.

Technically, this tech stock’s relative weakness is ready to work to its advantage. Shares are trading narrowly beneath a high handle or flat base breakout established after hitting a marginal all-time-high. With shares also inside a rising and opening Bollinger Band setup and stochastics trending higher, the back half of 2020 promises to narrow the performance gap for AVGO investors.

First Solar (FSLR)

First Solar (FSLR) massive three base pattern breakout attempt
Source: Charts by TradingView

The last of today’spicks is First Solar. These days, the alternative energy market seems to have all its attention on electric vehicle stocks like Tesla (NASDAQ:TSLA) or Nikola (NASDAQ:NKLA). But solar remains an important part of this mix. And while it has had its share of bumps over the years, industry giant First Solar looks well-positioned for some of Tesla’s proverbial cooler talk or these days, maybe a chat on Zoom with a business colleague during a work-from-home coffee break.

Technically, shares of this tech stock to buy have just broken above a small, constructive consolidation formed on top of prior downtrend resistance. It’s bullish. But it’s bigger than that too. Much bigger!

With FSLR shares also positioned slightly above the 62% retracement level within a third, corrective “base-on-base-on-base” formation developed over the last six plus years, there’s very strong reason to see and believe the third time will prove the charm for First Solar investors.

Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. Investment accounts under management currently own positions in Advanced Micro Devices (AMD) and its derivatives but no other securities mentioned in this article. The information offered is based on his professional experience but strictly intended for educational purposes only. Any use of this information is 100%  the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.

Article printed from InvestorPlace Media, https://investorplace.com/2020/08/3-diverse-tech-stocks-to-buy-that-are-breaking-out-now/.

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