2 Stocks to Buy During an April Pullback
So far in April, we’ve seen a noticeable change in the psychology of the market. The Dow Jones has fallen for four consecutive days to begin the second quarter and the S&P 500 fell below its 21 EMA for the first time since November. While bears might be celebrating I think it’s a little too early to be rejoicing in a market crash. Remember, the long-term trend remains up and dips are almost always bought in a strong bull market.
But with that being said, I do think we can afford to pull back from recent highs. Why? Because even in a strong bull rally, markets need to breathe and consolidate. I’m not calling for a 10% drop. More like a 5% reset. If this is the case, I do have my eyes on some stocks that I’ve been wanting to add at a lower price. Here are 2 stocks I’d buy during an April pullback.
Snowflake (NYSE: SNOW)
I’ve written about Snowflake in the past and have been relatively bullish on the stock. It was hit hard recently because of a sudden change in CEO which usually never sits well with shareholders. Well, that CEO recently bought $5 million worth of Snowflake stock with his own money which certainly got the attention of investors.
There is a model that companies use to really low-ball estimates for the first quarterly reports for new CEOs. Amazon did it with Andy Jassy and Disney did it with Bob Chapek. Now, I believe Snowflake did the same for Sridhar Ramaswamy. Does that mean the stock will rise? Not exactly. The chart is intriguing though as the stock currently sits at multi-month support levels around $150. There is also the earnings gap that needs to be filled above to about $212. The risk/return of buying Snowflake at these levels is pretty high, especially if we see further downside pressure in April.
Shopify (NYSE: SHOP)
Ah, Shopify. I feel like nobody even talks about this stock anymore. It was once beloved but ever since that stock split it just hasn’t been the same. It’s had a good year but so far in 2024, it’s traded basically flat while other tech stocks have run wild. Does that mean it is overdue for a rally? Actually, kind of, it’s just that we call this consolidation.
The chart is pointing bullish with a vague cup-and-handle starting to develop on the weekly view. Above, it has a pretty solid gap to fill up to $88 on the daily chart so I think we could be in for a bullish end to the year. It’s still not a cheap stock by any means, but if we believe that tech will continue to rally this year, which I do, then I think it’s worth a stab right at this long-term support area which also aligns with the 100-day EMA.
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