The investing environment has really changed in recently. We went from a market that was enjoying a strong uptrend to enduring a small pullback and then to genuine concerns about regional banks and higher interest rates. Despite these challenges, it still has investors looking for the best short-term stocks to buy.
When we’re looking for the best short-term stocks to buy, we want companies that have had bullish reactions to their earnings reports. We also want to see a trend of higher lows and higher highs on the chart, showing a stronger bullish technical setup.
Many of these names have been in tech — a target among bears in 2022. So far in 2023 though, these stocks have been trading much, much better.
If the selling pressure really picks up, these names will likely be in trouble. Still, let’s look at a few stocks that are setting up nicely on the long side this month.
|DKS||Dick’s Sporting Goods||$146.27|
Salesforce (NYSE:CRM) has been enjoying a strong rally off its December low. Coming into earnings, shares were up 32%. At the recent high, the stock was up almost 42%. None of that matters though, as shares ripped higher on earnings.
The stock jumped 11.5% after Salesforce delivered better-than-expected earnings and revenue expectations. Revenue grew more than 14% year over year and the company’s operating cash flow was robust.
Even better, Salesforce guided for better-than-expected first-quarter revenue and above-consensus earnings and revenue estimates for the full year.
That type of fundamental improvement has a tendency to drive a stronger technical situation, which is exactly what we have with Salesforce stock. If the stock can’t hold current support, we could see a gap-fill down to the $168 area and potentially a dip to the low-$160s.
However, it may be worth taking a shot on this one, particularly if the overall market can find its footing.
Nvidia (NASDAQ:NVDA) has not had the easiest run. As a large-cap growth stock, short-sellers and bears gunned for this name amid the raid on growth stocks.
It didn’t help that sagging demand and lower orders were hindering Nvidia’s guidance and quarterly reports.
Last quarter, sales sank 20% year over year to $6.05 billion, but topped expectations by $30 million. Not exactly robust, but it helped that earnings beat analysts’ expectations too. It helped considerably that guidance for the first quarter topped consensus estimates.
I admittedly am a long-term bull on Nvidia and I also admit this quarter was not exactly a blowout result. Instead, it was better-than-feared, but I’m not one to fight the trend. Nvidia stock continues to hold up well, still up more than 100% from the low.
Until some of these trends break, the stock is firmly in the buy-the-dip camp, although it would be a juicy buy after a harrowing decline should the market get dicey here.
Dick’s Sporting Goods (DKS)
Last but not least, we’re going to the retail sector with Dick’s Sporting Goods (NYSE:DKS). This is considerably smaller than the previous two companies, with a market cap of roughly $12.5 billion.
Size hasn’t been a deterrent though, with the stock recently notching new all-time highs. Shares rallied 11% after reporting earnings on March 7 and the subsequent rally carried it to new highs.
The retailer delivered a top- and bottom-line beat, full-year earnings guidance that topped analysts’ expectations and more than doubled its quarterly dividend to $1.00 a share. That gives the stock a yield of roughly 3% while trading around 10.5 times this year’s earnings outlook.
That is very impressive, given the bumpy situation with consumers. Given the strength in the stock and the recent weakness in the overall market, the situation with Dick’s can go one of two ways.
Either investors sell the stock to lock in profit or it becomes a hide-out spot for investors looking for a combination of strong fundamentals and technicals.
Until proven otherwise, this stock is also a buy-the-dip candidate for now.
On the date of publication, Bret Kenwell 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.