3 Blue-Chip Stocks to Trade Right Now

blue-chip stocks - 3 Blue-Chip Stocks to Trade Right Now

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It’s been a dazzling 2021 for most blue-chip investors. But in a market made up of indices and individual companies, some blue-chip stocks are declaring their right to trade more spirited and others independently of their peers. Today, let’s diplomatically walk the aisle and show price charts of three blue-chips to trade for bulls and bears.

The Dow Jones Industrials. The venerable blue-chip market average is up 13% entering the second-half of the calendar year. It’s also just off all-time-highs and nearly 100% removed from a deathly Covid bottom set back in March 2020.

Then there’s the blue-chip, tech-heavy Nasdaq. On both fronts, it’s enjoying a marginal lead with gains of 14% and 121% respectively. Life for many investors has obviously been good, right? Correct.

Yet in a market which has seen a rather sweeping risk-off rotation this year, endured inflation fears and other pandemic-blamed shortages and what not, not all blue-chips have been keeping up with the proverbial Joneses.

Some blue-chip stocks have led the charge. Goldman Sachs (NYSE:GS) is up 40% year-to-date and three-fold the Dow’s performance. At the same time, constituent Merck (NYSE:MRK) is at the back of the pack suffering a minor loss of 4.5%.

  • Amazon.com (NASDAQ:AMZN)
  • Biogen (NASDAQ:BIIB)
  • Intel (NASDAQ:INTC)

So, What’s an investor to do? I’d proffer sticking with the price charts. And then, as you’ll see below, diversify today’s bull market with a breakout to buy, a pullback to steal and a blue-chip losing its shirt that’s meant to be shorted.

Blue-Chip Stocks to Trade: Amazon (AMZN)

Amazon (AMZN) monthly corrective base breakout
Source: Charts by TradingView

The first of our blue-chip stocks to trade are shares of Amazon. And today, AMZN stock is a buy.

You don’t need me to tell you the tech giant’s goods and services were a godsend during Covid. They were. Nor do I need to state the obvious that AMZN’s tendrils, on the other side of the pandemic, will invariably be even more important in our lives. It’s as good as written in stone.

But today and maybe less noticeable, AMZN stock is also offering to make a meaningful difference in investors’ portfolios.

Technically, shares have busted out of a year-long corrective double-bottom pattern this month. With shares roughly 5% above pattern resistance and stochastics flattening near oversold levels, this well-constructed breakout should find shares conservatively reaching $4,000 to upward of $4,400 by the end of the year.

To minimize the breakout pattern’s downside risk while leveraging its upside potential, a September $3,700/$4,000 bull call spread or November $3,800/$4,100 call vertical are two favored plays on this blue-chip stock.

Biogen (BIIB)

Biogen (BIIB) massive breakout followed by well-supported pullback to buy
Source: Charts by TradingView

The next of our blue-chip stocks to trade is biotech giant Biogen. Shares surged higher in early June following word of U.S. regulators approving a first-ever Alzheimer’s drug. It was a “big day” for patients, but possibly more challenging for investors despite the session’s gain of nearly 40%.

The difficult testing of Biogen’s shareholders could be changing, though. And I’m upbeat BBIB stock is a buy.

Technically, the past month since the announcement has worked to form a pullback pattern backed by prior pattern resistance lines and 50% Fibonacci retracement level. It’s potentially bullish. And with BIIB’s monthly stochastics bullishly expanding in neutral territory, this pullback looks like a more certain blue-chip stock to buy.

For positioning in BIIB stock, let’s have this blue-chip show us the money with a well-structured August $360/$380 bull call spread.

Blue-Chip Stocks to Trade: Intel (INTC)

Intel (INTC) monthly double top still warning of lower prices to come
Source: Charts by TradingView

The last of our blue-chip stocks to trade are shares of Intel. It’s the largest semiconductor by revenues, but it’s also been losing its shirt in recent years to chips from Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD).

I’m always open to the idea of a comeback. But today and on the price chart, this blue-chip remains a name to short.

Technically and as the monthly view of INTC reveals, the stock confirmed a volatile double-top pattern in May. Shares have since signaled a possible conclusion to the bearish cycle as June’s candle penetrated the high of May’s hammer.

But a failure to rally, as well as diverging and bearish stochastics has our attention.

I’m forecasting INTC’s bearish cycle is unlikely to finish until shares challenge pattern and Fibonacci support near $48 to $49 a share. And I think that’s going to happen in 2021’s second-half.

To better hedge that proposition, off and on this blue-chip stock’s price chart, a purchase of the October $52.50/$50 put spread looks about right.

On the date of publication, Chris Tyler hold (either directly or indirectly) positions in Advanced Micro Devices (AMD) and its derivatives. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.


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