Connect with us

Economics

7 Stocks to Buy on Any Stock Market Dips 

I love stock market corrections. Of course, I know a lot of people will say that, then panic when we get a run-of-the-mill 5% to 10% dip in the indices….

Published

on

This article was originally published by Investor Place

I love stock market corrections. Of course, I know a lot of people will say that, then panic when we get a run-of-the-mill 5% to 10% dip in the indices. But the truth of the matter is, these corrections highlight the top stocks to buy. 

I have laid out my views and strategy on buying high-growth stocks during corrections before. However, there are other strategies to keep in mind here as well. One of those strategies? Relative strength. 

Simply put, when the market is correcting, I like to look for stocks that are outperforming. That’s strength that is relative to the general market, like the S&P 500 or the Nasdaq

During the latest pullback, we not only found stocks that held up well, but stocks that actually traded higher. So, if the market takes another dip — and drags some of these stocks down a bit in the process — they are likely to be among the first names to snap back higher on the rebound. 

All that said, here are seven stocks to buy on any market dips:

  • Advanced Micro Devices (NASDAQ:AMD)
  • Cloudflare (NYSE:NET)
  • Upstart (NASDAQ:UPST)
  • Tesla (NASDAQ:TSLA)
  • Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG)
  • Netflix (NASDAQ:NFLX
  • Affirm (NASDAQ:AFRM)

Stocks to Buy on the Dip: Advanced Micro Devices (AMD)

Source: JHVEPhoto / Shutterstock.com

First up on this list of stocks to buy is AMD. I won’t provide charts for every pick on this list, but I do want to provide one for Advanced Micro Devices. 

Not only did AMD stock put together a very impressive breakout last week — one that I discussed in my top stock trades column — it also had a robust rally earlier in the year. Amid that rally, volume was incredibly high. 

What does that indicate? To my interpretations, combined with the power in which AMD hit new highs, this suggests institutional buying. Otherwise known as “accumulation,” these types of footprints on the chart suggest some big purchases. 

stocks to buy like AMD
Click to Enlarge
Source: Chart courtesy of TrendSpider

As we saw on the ensuing dip, AMD stock was able to find support. In this case, it came near the key level and breakout area around $100. Now on ensuing dips, I expect buyers to continue supporting the name. 

Not to mention that AMD’s powerful growth rates continue to overwhelm analysts, who consistently put out too conservative of expectations. All told, be sure to stick with this long-term winner.

Cloudflare (NET)

Close up of Cloudflare logo at the Company's headquartersSource: Sundry Photography / Shutterstock.com

Cloudflare has been enjoying a robust rally. NET stock bottomed on Oct. 1 and has rallied every session since (as of Oct. 20). Now up in 14 straight sessions, the stock has enjoyed a rally of more than 55% during that span. 

That’s an incredible move, especially for a company that now has a market capitalization of $57 billion. Of course, I don’t know how long the rally will continue. But given this bout of relative strength, I expect bulls to buy the dip. 

Cloudflare has impressive growth estimates to go along with its impressive chart, too. Analysts expect almost 50% revenue growth this year and more than 33% growth in 2022. In 2023, estimates sit at about 30%.

In other words, NET has strong momentum in its business. If it can continue to deliver on that growth, the stock should keep on enjoying strong runs to the upside. Look for this pick of the stocks to buy to fetch a bid on the pullback.

Stocks to Buy on the Dip: Upstart (UPST)

hands at desk near laptop computer, with one hand holding a pile of hundred dollar billsSource: shutterstock.com/CC7

Like Cloudflare, Upstart has enjoyed a pretty powerful run as well. Unlike Cloudflare, though, the stock didn’t wait until October to begin its rally — although both stocks to buy hit new all-time highs this month.

From its low on Aug. 10, UPST stock has rallied almost 200% to its 52-week high. That’s incredibly impressive, particularly as the broader stock market has been largely enduring a slow but steady pullback since the S&P 500 topped out on Sept. 2. 

Upstart did suffer an 18% pullback from the September high. However, buyers quickly stepped in and bid the stock back up to new highs. Perhaps another correction occurs from here and hits UPST again. At the least, at some point there will be another decline. 

For now, though, the bulls are in control. But if shares come under pressure, look for the dip to be bought.

Tesla (TSLA)

Tesla (TSLA) badge on back end of red Tesla carSource: Hadrian / Shutterstock.com

Tesla is a highly emotional battleground cult stock. This pick of the stocks to buy commands a high valuation and a big market cap, sitting at more than $890 billion currently. Personally, I think the runway is being cleared for a run to $1,000 per share and a $1 trillion market cap.

Will it get there this quarter? 

Despite the pullback in the overall market and for many electric vehicle (EV) stocks, Tesla has shown remarkable dependability and relative strength. The stock has traded higher for weeks, enjoying breakout after breakout. Now it has nothing standing between it and its all-time high near $900 — at least, technically speaking. 

A correction is more than possible at some point and one could even argue that a pullback would be healthy. However, I expect TSLA stock will find buyers on a dip, given how well it has traded over the past two months through the current market correction.

Not to mention that Tesla continues to deliver better-than-expected as well as record delivery results. If the market goes on to enjoy a year-end rally, look for the dips to be bought aggressively in Tesla.

Stocks to Buy on the Dip: Alphabet (GOOG)

Earnings reports: Google (GOOG, GOOGL) headquarters in Mountain View, California.Source: achinthamb / Shutterstock.com

Next up on this list of stocks to buy, Alphabet is the best-performing FAANG component so far this year and over the past 12 months. The stock is up 62% year-to-date (YTD) and 83% for the one-year stretch, respectively. That’s despite GOOG stock pulling back with the rest of the market. 

Alphabet is firing on all cylinders right now. The company continues to deliver impressive results, beating on earnings and revenue expectations for five straight quarters. In the most recent quarter, sales of roughly $62 billion beat estimates by almost $6 billion. Earnings per share (EPS) of $27.26 also beat expectations by some $8 per share. 

The momentum in this company’s business is impressive, just as the run in the stock price has been. Until this momentum slows, bulls should continue to buy the dips in this FAANG leader.

Netflix (NFLX)

the netflix logo displayed on a tablet that a person is holding while laying downSource: Kaspars Grinvalds / Shutterstock.com

Changing gears a bit, what about Netflix? While Alphabet trounces it on the YTD and one-year measures — and it trounces all of the FAANG components — NFLX stock is still a better-performing component over the last one- and three-month periods. 

The run has been enough to send Netflix to all-time highs (and a key extension point). Now, however, we’re getting a pullback

Netflix does not have the same dependable business that Alphabet does. That said, it does have strong momentum. Investors don’t want to bet against that momentum until it has clearly vacated the stock.

Earnings were reported on Oct. 19, but don’t appear to be altogether derailing the rally. Let’s see if this pick of the stocks to buy can push higher once again.

Stocks to Buy on the Dip: Affirm (AFRM)

Affirm (AFRM) logo displayed on a smartphoneSource: Piotr Swat / Shutterstock.com

Last up on this list of stocks to buy is AFRM stock. Where did Affirm come from, now commanding a nearly $42 billion market cap? The company went public back in January, quickly garnering a huge valuation. However, the stock underwent a long and painful decline after that, losing almost 70% of its value. It didn’t help that it went public right before growth stocks blew the top off and went on a massive rally. Affirm bottomed with the rest of the growth stocks in early May. 

However, when the company announced a new deal with Amazon (NASDAQ:AMZN) in September, it caught some serious momentum again. Plus, a month later, it announced a deal with Target (NYSE:TGT). That has also helped propel this name higher. 

Two massive deals with two massive retailers and two massive rallies as a result. Achieving this ahead of the holidays was also a key catalyst to AFRM stock’s recent run. But when it comes down it, Affirm’s business — providing small shopping loans to consumers  — is a perfect fit for retailers and the online world we find ourselves in now. 

Granted, this pick of the stocks to buy has been a volatile ride. The big rallies make it susceptible to a pullback. However, with a dip, buyers are likely to be nearby. 

On the date of publication, Bret Kenwell held a long position in AMD. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell

More From InvestorPlace

The post 7 Stocks to Buy on Any Stock Market Dips  appeared first on InvestorPlace.

Author: Bret Kenwell

Economics

New Zealand cash rates – the canary in the coal mine?

My son, Angus, ventured into the Sydney residential market at the beginning of the year acquiring a small apartment, with what I considered to be an enormous…

My son, Angus, ventured into the Sydney residential market at the beginning of the year acquiring a small apartment, with what I considered to be an enormous loan from one of the Big Four. At the time the fixed four-year home loan rate was around 1.95 per cent per annum. Today, the advertised rate has jumped 1.0 per cent per annum to around 2.95 per cent. This reflects the Australian four-year Government Bond yield moving up from 0.20 per cent at the beginning of 2021 to the current 1.32 per cent.

The likely response to this change from property buyers today is that a much higher proportion of their mortgage will be attributed to a variable home loan. This rate typically reflects the Reserve Bank of Australia’s (RBA) cash rate, and at 0.10 per cent per annum it is currently at a record low, and well below the “emergency low” of 3.0 per cent per annum implemented during the Global Financial Crisis (6 months to September 2009).

Across the ditch, the Reserve Bank of New Zealand (RBNZ) has raised its official cash rate for the second time in two months by 0.25 per cent to 0.75 per cent per annum to counter growing inflation, which hit 4.9 per cent in the September 2021 quarter, and is expected increase to 5.7 percent in the March 2022 quarter.

RBA vs RBNZ cash rate

Markets are currently pricing in five more 0.25 per cent increases by the RBNZ over the next twelve months to a targeted 2.0 per cent per annum. Will New Zealand be seen as a canary of the coal mine moment given inflation has become a global problem? Only time will tell, however if cash rates happen to jump by 1.5 per cent and this filters through into the rate for variable home loans. The tailwinds currently being enjoyed by asset owners (with debt) – close to nil interest rates – could easily become headwinds.

The US inflation figure for October 2021 hit 6.2 per cent, a 30 year high.  Selected CPI subcategories saw the following 12 month changes: Beef +24 per cent, gasoline +51 per cent, natural gas +28 per cent and used cars and trucks +26 per cent. The UK was not far behind, with an inflation rate of 4.2 per cent for October.

ds-us-inflation-2021-2

Global supply chain bottlenecks and shifting consumer demand from services to goods could well be transitory, but as the Founder of Bridgewater Associates, Ray Dalio, warns, “raging inflation” is eroding people’s wealth today – particularly those who have their money in cash.




Author: David Buckland

Continue Reading

Economics

Dow Jones, the S&P 500, and Nasdaq price forecast after sell-off on Friday

Wall Street’s three main indexes ended sharply lower on Friday as news of a new COVID variant worried investors around the world. The World Health Organization…

Wall Street’s three main indexes ended sharply lower on Friday as news of a new COVID variant worried investors around the world.

The World Health Organization (WHO) on Friday designated a new COVID-19 variant detected in South Africa, and a lot of people didn’t want to hold risk assets on Monday morning or are afraid of what that could look like Monday morning.

Markets are reacting negatively because it is unknown at this point to what degree the vaccines will be effective against the new strain and would it initiate new lockdowns around the world. David Kotok, chairman and chief investment officer at Cumberland Advisors, added:

All policy issues, meaning monetary policy, business trajectories, GDP growth estimates, leisure, and hospitality recovery, the list goes on, are on hold. The new strain may complicate the outlook for how aggressively the Federal Reserve normalizes monetary policy to fight inflation.

The new Omicron coronavirus is detected in Britain, Italy, Netherlands, Germany, Israel, Belgium, Botswana, Denmark, Hong Kong, and Australia for now.

Britain has already imposed travel restrictions on southern Africa, while the European Commission is considering suspending travel from countries where the new variant has been identified.

The upcoming week will be busy, and investors will pay attention to Fed Chair Jerome Powell and U.S. Treasury Secretary Janet Yellen’s appearance before Congress to discuss the government’s COVID response on November 30.

S&P 500 down -2.3% on Friday

 S&P 500 (SPX ) weakened by -2.3% on Friday and closed the week at 4,594 points.

Data source: tradingview.com

If the price falls below 4,500 points, it would be a strong “sell” signal, and we have the open way to 4,300 or even 4,200 points.

The upside potential remains limited for the week ahead, but if the price jumps above 4,650 points, the next target could be around 4,700 points.

DJIA down -2.5% on Friday

The Dow Jones Industrial Average (DJIA) weakened -2.5% on Friday and closed the week below 35,000 points.

Data source: tradingview.com

The Dow Jones Industrial Average remains under pressure as news of a new COVID variant worried investors worldwide.

The current support level stands at 34,500 points, and if the price falls below this level, the next target could be around 34,000 points.

Nasdaq Composite down -2.2% on Friday

Nasdaq Composite (COMP) has lost -2.2% on Friday and closed the week at 15,491 points.

Data source: tradingview.com

The strong support level stands at 15,000 points, and if the price falls below this level, it could be a sign of a much larger drop.

Summary

Wall Street’s three main indexes ended sharply lower on Friday after the news that the World Health Organization designated a new COVID-19 variant detected in South Africa. All policy issues go on hold currently, and investors will pay attention to the government’s COVID response on November 30.

The post Dow Jones, the S&P 500, and Nasdaq price forecast after sell-off on Friday appeared first on Invezz.







Author: Stanko Iliev

Continue Reading

Economics

Wind Power Becoming too Cheap for Industry to Sustain Itself

The price of generating wind power has gotten so low, that companies may soon be unable to invest in additional
The post Wind Power Becoming too Cheap…

The price of generating wind power has gotten so low, that companies may soon be unable to invest in additional technologies for the sector.

According to major turbine-making company Siemens Gamesa, the cost of wind power has recently dropped to such a low level that it can finally challenge the fossil fuel industry, mostly due to an abundance of investments in renewable energy. “What we’ve clearly achieved is that wind power is now cheaper than anything else,” said the company’s CEO Andreas Nauen as quoted by Reuters.

However, Nauen warned that “we shouldn’t make it too cheap,” because it could hinder the influx of additional investments in the green space. Across Europe, both wind and solar are substantially cheaper that natural gas, coal, and even nuclear power. And, with governments’ strong ambitions to adopt a climate friendly agenda, the demand for wind turbines has reached a record-high; but, the relatively lower prices and increased competition have also eroded away at producers’ margins.

“We have probably driven it too far,” said Nauen, adding that if prices continue to decline, the sector won’t be able to invest in further innovations. To make matters worse, accelerating global inflation for raw materials, coupled with supply shortages, also threatens to squeeze turbine makers’ margins. Moreover, governments around the world have begun eliminating generous wind subsidies in favour of more competitive contracts submitted by the lowest bids.

“We need to change auction systems in the future,” said Nauen, suggesting that local job creation should be governments’ top priority, rather than just the lowest price.


Information for this briefing was found via Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

The post Wind Power Becoming too Cheap for Industry to Sustain Itself appeared first on the deep dive.

Author: Hermina Paull

Continue Reading

Trending