It has been another great year for many investors. But before you grow leery of a bull market whose legs may be rightfully fatigued, it’s time to check out three diverse mid-cap stocks to buy sporting strong growth prospects and price charts insisting another party may just be getting started.
With the clock ticking and the calendar page ready to be turned to 2022, a second straight year of boisterous and maybe whimsical returns are all but certain for Wall Street.
The broad-based, large-cap S&P 500 is up nearly 28% on the year at record highs. The tech-heavy Nasdaq Composite is putting in a similar performance. And let’s not forget the venerable blue-chip Dow Jones Industrials.
But lest you think 2021’s rally is all about a select handful of corporate heavyweights muscling the market, think again. This year’s continued throwback to another Roaring ‘20s era from a century ago extends beyond a handful of large-cap influencers.
The fact is mid-cap stocks are enjoying similarly strong gains without the benefit of Microsoft (NASDAQ:MSFT), Costco (NASDAQ:COST), Nvidia (NASDAQ:NVDA) or Tesla (NASDAQ:TSLA) doing their bidding.
Still, in a market made up of many mid-cap stocks, for some investors the only roar being heard is that of a bear.
Today, let’s look at the price charts of these mid-cap stocks, which continue to prove there’s always a bear market somewhere. More importantly, let’s look at three of these corrective cycles which offer compelling longer-term growth narratives that investors can monitor for buying at solid-looking discounts.
Mid-Cap Stocks to Buy: Matterport (MTTR)
Source: Charts by TradingView
The first of our mid-cap stocks to buy is recent special purpose acquisition company (SPAC) Matterport.
This $5.15 billion company may not be the next Facebook — or rather Meta Platforms (NASDAQ:FB) — but it turning into a ten-bagger with the help of the tech giant looks quite possible.
In a nutshell, this mid-cap stock’s technology allows users to turn physical space into an immersive 3D world. Today, Meta Platforms is using the company’s 3D simulation models with robots. But there’s much more to MTTR stock.
If you believe Facebook’s name change is a prescient signal for the internet’s next big revolutionary step into the metaverse, then MTTR stock is a compelling picks-and-shovels play that’s also building important bridges in this digital frontier.
Technically, shares of this mid-cap stock to buy have collapsed 35% over the past month. But the bearish cycle appears close to completing, with MTTR shares trading inside a well-supported bullish hammer for a second week.
Aesthetically, I’d like to see MTTR’s weekly hammer continue to hold as a pivot low for an uptrend that’s formed since May’s corrective bottom. But the volatility engineered by bears, bulls and apes in this stock to buy may torch that kind of pleasant possibility.
As such, I’d suggest waiting for an oversold weekly stochastics to signal a bullish crossover, but not worry so much about classic price confirmation in fear of playing this mid-cap too close to the vest.
When that day does arrive, a hedged campaign in MTTR (which looks to position more smartly as this mid-cap stock to buy moves firmly into Wall Street’s big leagues) is a favored approach.
Opendoor Technologies (OPEN)
Source: Charts by TradingView
The next of our mid-cap stocks to buy is next-gen real estate play Opendoor Technologies.
A near two-month-long bearish cycle has sliced 45% off shares. Opportunistically, it’s also allowing investors to purchase a solid growth narrative at a discount.
Much of this mid-cap stock’s pressure has centered on peer Zillow’s (NASDAQ:Z) announced departure from its iBuying business after a good ol’ fashioned knockdown and investors willing to treat OPEN stock as collateral damage.
But this mid-cap stock to buy has actually differentiated itself through more calculated housing purchases which have balanced growth and increased gross profits.
Also, with a market cap of around $8.6 billion and estimated revenues of $15 billion for 2022, OPEN stock’s price-to-sales multiple comes in at a puny 0.57.
To be fair, Opendoor operates in an expensive market, so the argument for a slighter valuation can’t be entirely dismissed. As well, a jump in mortgage rates or a less likely housing crisis could adversely impact today’s seemingly attractive valuation.
It’s always something though, right? Besides, the doorway for much larger growth does appear wide open in this mid-cap stock to buy. What’s more, given today’s alluring bearish invitation on the OPEN stock price chart, the real welcome mat could be laid out for bulls shortly.
Technically, a bearish flag has formed against prior trendline support. And for the time being I’d respect the implications.
However, should the flag’s embedded weekly hammer be cleared alongside continued bullish stochastics alignment, this mid-cap stock to buy stands ready to deliver a much happier new year for investors.
Mid-Cap Stocks to Buy: Bloom Energy (BE)
Source: Charts by TradingView
The last of our mid-cap stocks to buy is Bloom Energy.
The green hydrogen play has been hurt in recent days with President Joe Biden’s proposed Build Back Better spending package and its allocated $555 billion towards alternative energy on shakier ground than America’s infrastructure.
The thing is though, BE stock is doing great away from Capitol Hill and across both ponds.
This month, the hydrogen outfit announced a collaboration with Chantiers de l’Atlantique for the first cruise ship ever to use Bloom’s fuel cell technology.
And earlier this quarter this mid-cap stock to buy scored a massive South Korean deal that will generate $4.5 billion in revenue by 2025 as part of a contract for at least 500 megawatts of fuel cells.
That’s big news for a $3.5 billion company with sales approaching $1 billion in 2021. As well, investment money from the agreement should help further commercialize BE’s hydrogen solutions.
Technically, a 43% bear market cycle since early November has filled a positive weekly chart price gap. Advantageously, the decline also sets the stage for a higher-low pattern entry.
To power your portfolio more securely with this mid-cap stock to buy, look for a weekly crossover in this mid-cap’s stochastics indicator, coupled with a second trade-through from the weekly pivot low.
On the date of publication, Chris Tyler did not have (either directly or indirectly) any positions in the securities mentioned in this article. 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.