Markets have been wild.
Since the year began, the Dow Jones slipped from a high of about 37,000 to 33,150. The NASDAQ fell from 15,852 to 13,094. The S&P 500 plummeted from 4,818 to 4,222.
Fear exploded, with the Volatility Index (VIX) up to 38.94. All thanks to a lack of any real clarity from the Federal Reserve. At the same time, the pullback became overkill.
However, it also created obscenely oversold opportunities.
Look at Microsoft (MSFT) for example.
After failing at triple top resistance around $345 to a low of $285.17, the stock appears to have caught strong support dating back to October. Plus, it’s also severely oversold on RSI, MACD, and Williams’ %R. Better, earnings weren’t bad at all.
In its second quarter, the company posted adjusted EPS of $2.48, as compared to expectations for $2.31. Revenue of $51.73 billion was above estimates for $50.88 billion.
Analysts like the stock here, too. “We’d be buyers here,” said Christopher Ouimet, a portfolio manager at Logan Capital, as quoted by CNBC. “We think there’s a lot of noise in the marketplace right now. Most of the high-growth stocks are getting washed out here, but we don’t really feel like the 10-year going from 1.5% to 1.8% means Microsoft isn’t going to be able to sell Azure contracts.” Even Piper Jaffray says the MSFT pullback is overdone.
From a current price of $288.49, we’d like to see MSFT again challenge triple top resistance around $345 again, near-term.
Or, look at Tesla (TSLA).
Tesla also pulled back from triple top resistance around $1,200, and caught support around $850. It’s another example of overkill. Plus, with the electric vehicle boom showing no signs of slowing down, investors may want to use weakness as a buying opportunity.
Better, analysts love this stock.
Piper Jaffray analyst Alexander Potter, for example, just raised his estimates for TSLA to reflect better than expected fourth quarter delivery numbers, as well as a higher estimate for 2022, as noted by TheFly.com. “He now expects 1.53M units delivered in 2022, up from 1.38M previously. Potter is also nudging his 2022 margin expectations higher. With strong volume and a rising contribution from software, Tesla will continue exceeding profitability expectations.”
From a current price of $969.60, we’d like to see the stock closer to $1,200, near-term.
There’s even Advanced Micro Devices (AMD).
Advanced Micro Devices plummeted from about $155 to a low of $107.50 – another instance of overkill with the tech rout. It’s also wildly oversold on RSI, MACD, and Williams’ %R, and could recover from its 200-day moving average at around $109 back to $155.
With a good deal of negativity priced into the stock, the stock could really take off heading into its next round of earnings, too. Plus, as it continues to chip away at major competitors, analysts love the stock here, too. Barclays for example, just raised its target to $148 from $135. Mizuho raised its target price from $135 to $150. Even Cowen boosted its target to $150 from $145.
We believe the AMD dip offers a solid opportunity at a significant discount.
