2 Stocks Primed for a Rebound
How did everyone fare this week? For the first time in months, bears got the upper hand on bulls as the overbought NASDAQ and S&P 500 pulled back. Remember that these cooling-off periods are completely normal and healthy for any market. If anything, this could be a bullish consolidation period before the next leg up.
While stocks like Tesla (NASDAQ: TSLA) and NVIDIA (NASDAQ: NVDA) have been making headlines this year, other great companies have not seen as much support. Part of successful trading is finding which stocks are oversold and buying those dips. Here are 2 stocks that I think have room to move to the upside.
AMD (NASDAQ: AMD)
We all know what NVIDIA has down so far this year, so why is AMD lagging behind? Call it a bubble if you want but AI is truly going to change a number of, if not all, industries in the future. When there are secular changes like this there is never just one winner. NVIDIA might be in the lead now but don’t count out AMD which has shown in the past it can more than hold its own. Last week, Morgan Stanley chose NVIDIA as its top AI pick, replacing AMD. Later in the week, AMD unveiled its newest AI chip which will go head-to-head with NVIDIA’s. Both of these were seen as bearish events by AMD investors and the stock has now fallen by more than 12% over the past week. AMD is falling toward its 50-day moving price of around $105, and I think it will see a nice bounce higher when it gets to these levels. There is a ton of support for the stock around $105 and I think that level holds for a nice rebound for one of the industry’s best companies.
Block (NYSE: SQ)
Block has always been a difficult stock to figure out. It obviously peaked during the COVID-19 pandemic when touchless payments were overvalued by investors. But the stock hasn’t seen any movement despite Bitcoin making new 52-week highs this week. Block used to be one of the stocks most associated with Bitcoin so it was surprising to not see any reaction. The company itself has done fairly well in recent quarters but it seems like the stock has been pinned at around the $60-$65 price level. The stock seems to be using its 50-day and 200-day moving averages as a tight range of support and resistance right now, and there seems to be a lot of support around $60 at its bottom. If Bitcoin continues to see this momentum from the institutional interest in creating spot ETFs, I fully expect Block to absorb some of it in the near-term future. At the same time, fintech stocks like Block and PayPal (NASDAQ: PYPL) are simply out of favour with the market right now. We might just have to wait until a rotation back to financials to see any positive momentum for Block. I still think there is a chance for some Bitcoin momentum though!
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