If you are on the lookout for high-risk, high-reward opportunities, you have many choices when it comes to which stocks to buy.
However, you may want to consider which of these names are in the “Green Zone.”
TradeSmith offers investors valuable tools for determining which stocks to watch. A good example is its Health Indicator feature. This comprehensive indicator provides an overall rating of a stock’s current health.
Using this metric, you can quickly find potential opportunities to explore. Broken down into three “zones” (green, yellow, and red), you’ll have a general idea about whether it’s best to be bullish, bearish, or neutral on a particular stock.
As you may have guessed, stocks in the “Green Zone” are performing well, with little indication that the trend is on the verge of shifting.
A stock in the “Yellow Zone” has corrected by more than 50% of its volatility quotient (VQ), a proprietary TradeSmith metric that helps measure a stock’s risk. When a stock in your portfolio goes from green to yellow, it may be a good time to reassess whether to maintain the position.
Stocks entering the “Red Zone” have corrected by more than their calculated volatility quotient. VQ can be useful when adding stop losses to your positions. View any move into the “Red Zone” as a warning sign to exit your position for now.
With this, let’s take a look at three stocks to buy, each of which is currently in the ‘Green Zone.”
UiPath (NYSE:PATH) has been in the “Green Zone” for over 10 months. During this time frame, shares in this robotic process automation (or RPA) software provider have steadily climbed higher. Even as the market has been on the fence whether the rise of generative AI helps or hurts the company’s prospects, factors like strong quarterly results have helped to weigh investor sentiment toward bullishness.
The next big event for PATH is set to happen on Nov. 30. That’s when the company will release its latest quarterly results. A majority of analysts have raised their pre-earnings forecasts for UiPath, but another revenue/earnings beat isn’t out of the question.
That’s not all. Further guidance regarding UiPath’s ability to capitalize on generative AI could also spark a new round of high investor enthusiasm. TradeSmith’s volatility quotient for PATH is 54.38%, which makes it a sky-high risk stock.
Palantir Technologies (PLTR)
Palantir Technologies (NYSE:PLTR) has been in the “Green Zone” for over 6 months. This is not a surprise, considering that the market has aggressively bid up the company’s shares. Largely, due to increasing confidence in its ability to capitalize on the rapid adoption of artificial intelligence applications by commercial and governmental end-users.
Yes, after nearly tripling in price so far this year, PLTR stock has spiked in price faster than its underlying business has grown. However, given the high level of customer count growth (34%) last quarter, confidence is rising that Palantir is starting to experience a growth resurgence.
If this plays out in the quarters ahead, PLTR may be able to not only sustain its current stock price (around $20 per share), but add to these gains as well. TradeSmith’s volatility quotient for PLTR is 52.46%, which makes it a sky-high risk stock.
Roku (NASDAQ:ROKU) entered the “Green Zone” three weeks ago. After surging and sinking earlier in the year, shares in the streaming platform operator have been on a tear since the company’s latest quarterly earnings release on Nov. 1.
For the quarter, Roku reported 20% year-over-year revenue growth, large increases in total active accounts and streaming hours, and earnings that handily beat expectations. Yet even after nearly doubling in price, don’t assume that ROKU stock has ceased to be one of the top stocks to buy.
Between a rebounding ad market, the company’s recently implemented cost-cutting measures, as well as continued growth of its user base, there’s much in motion that could keep ROKU soaring in 2024. While not a strong catalyst, Roku has been cited as a possible takeover target as well. TradeSmith’s volatility quotient for ROKU is 55.24%, which makes it a sky-high risk stock.
The TradeSmith Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.