3 stocks to buy in case of weakness and good fundamentals
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the S&P 500 broke records last week and again early this morning. This despite a wall of worries that investors keep climbing. It is almost as if there is no bear, which makes it easy to find opportunities to buy stocks when there is weakness. Investors step in to buy at every drop.
While we have broken records in some indices, there are others that are struggling. So there are a lot of stocks that have been selling for weeks. Today we highlight three such stocks to buy, but for completely different reasons. They share a common theme, which is the relative weakness of their graphics. However, their fundamental principles are not linked in any way.
The first thing to recognize is that altitude increases the likelihood of a correction. We cannot be bearish in this relentless bull market that refuses to stop. But we can just point out potential potholes along the way. Therefore, these opportunities are tactical in nature at this time.
Bulls have been buying declines for years and that won’t change until market conditions change as well. The weakening Federal Reserve will not be an obstacle to stock price movements for some time. Companies that are successful now will not be less successful in March or April after taper ends. Nonetheless, this is one step among many that they will take in order to cool the economy. They tried this in 2018 and failed so I bet they won’t be aggressive this time around.
We are approaching the end of the year on a positive note. Investors ignored the bad sentiment last week for a good win. Experts have warned of the potential for the year in the tax sale. But we haven’t seen it hit the S&P 500 ramp. We’re still in title mode. The Covid-19 mutation is making waves, but so far reports have been milder than its predecessor.
In deciding to buy stocks, I ignore headlines that are irrelevant to earnings power. Today, I am focusing on successful fundamentals and auspicious graphic techniques. Here are the three actions for buying ideas:
Shares to buy: Solana (SOL-USD)
Source: Charts by TradingView
The first on the list is not even a business but rather a cryptocurrency. Notice I didn’t say “currency” because I didn’t and doesn’t need to be. All crypto transactions happen over networks and there are companies that own the highways. They charge tolls to prove the stake, so they have native coins to back them up.
Ethereum (CCC:ETH-USD) is the leader, and Solana is one of the rising challengers. Therefore, SOL-USD which is its coin will also have a rosy future as long as this continues. So far, it seems to be faster and cheaper, so there is no reason for it to fail.
The people behind her get the benefit of the doubt. Cardano (CCC:ADA-USD) is another competitor and they would both be good buying opportunities, especially during the lows of last week. Those looking for quick crypto money probably already have it. But the most exciting part is owning it for the long haul.
It’s very tempting to book 30% profit in a few hours and I’ve done it before. But at some point we would need to accumulate them for a long time. We have an incentive through a process called staking, and Solana is involved in it. Think of it like dividends on a stock or certificate of deposit account with a high interest rate. Currently there is no fixed income anywhere, so this is definitely an attractive bonus to hold.
The fundamentals are simple because electronic payments are likely to replace cash in the future. Everything that is currently going on in the crypto world lays the foundation for this system. I suggest picking up speed now, so you don’t have a very steep ramp to climb later.
Source: Charts by TradingView
The crisis of 2020 was a wake-up call to many people, and I admit I was not ready. Therefore, I have become a bit of a prepper lately for the next time. Owning a generator even though I don’t need one in my area seems like a great idea.
I think more people will if solar solutions become more ubiquitous. Currently I have solar power but I am still on the grid. Generac could help me turn this into a more off-grid on-demand solution. They offer great products and are a leader in their segment.
Their income statement says a lot about their success. In four years, turnover has doubled and net income has tripled. This suggests that they are already doing a good job. Conversely, GNRC stock is 30% below its highs, but 300% above 2019 levels. There is a bottom here, but it’s not a good deal compared to its days. pre-pandemic.
The face value of the price tag for the GNRC is high. Therefore, it is conducive to use options as a buy-sell strategy to mitigate some risk. Savvy investors who hold stocks for a long time can benefit from writing covered calls against them. This would essentially create synthetic dividends as long as they can part with it higher.
The GNRC stock chart suggests it has fallen to an earlier base. He had launched a massive rally in June. When stocks do this, they tend to find buyers hiding there to repeat the process. It’s not foolproof and the GNRC could drop closer to $ 300 per share. As long as they can hold $ 335, a tranche here would make sense for the long-term investor. I would view this as a 10% swing trade opportunity.
Shares to buy: ChargePoint (CHPT)
Source: Charts by TradingView
It is worrying that despite the success of the EV concept, the stock of CHPT continues to decline. But that’s where the opportunity lies, which is to buy the downside again. I wrote about this in October and it yielded over 20% rise. It is an even clearer and similar opportunity.
The concept and long-term fundamentals are still as viable as they have been. Timing seems to be the variable in swing. Therefore, today’s opportunity is suitable for traders as well as investors. Neither should be thoroughly due to extrinsic factors.
The drop here has nothing to do with internal issues. The whole cohort is in trouble on Wall Street. Flashing load (NASDAQ:BLNK) and EVgo (NYSE:EVGO) Stock charts can perfectly overlap with CHPT. The whole world is committed to making alternative fuel electric vehicles more ubiquitous. Therefore, demand will not be a problem.
All the CHPT stock needs are more corporate report cards. Investors need proof of results before they can give the stock the benefit of the doubt. Meanwhile, investors can take advantage of pockets of sentiment weakness to profit.
At the date of publication, Nicolas Chahine had (directly or indirectly) no position on the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the publication guidelines of InvestorPlace.com.
Nicolas Chahine is the Managing Director of SellSpreads.com.
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