3 Nasdaq Stocks to Buy Off Their Corrective Bottoms

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Is the market correction over? In another era, that question might have made good watercooler talk for the leading Nasdaq Composite and its trillion-dollar henchmen. But in our current “socially-distanced” market, the technical price charts make a strong case for Nasdaq stocks to buy today.

Just when it looked like a long-awaited and seasonally well-timed correction was underway, oversold bargain-hunting this week has some wondering if the relative bottom has already been touched. And it’s not entirely for naught either.

At Monday’s low, the Nasdaq traded just over 11% off its recent high to narrowly dip its toes into a bonafide correction. But respectfully, it’s the type of decline that’s marked the completion, rather than the start, of more than a few meaningful pullbacks. The fact is, larger corrections are simply much rarer events. That’s not all though.

At its worst, the CBOE Volatility Index, or “fear index,” traded at a historically-elevated 38%. That bearish spike in sentiment is more than enough to mark a significant bottom for the stock market. Sure, back in March, during the worst of the market’s Covid-19 sell-off, the instrument screamed towards 86%. Historically though, this week’s indicated sweating by investors ranks among the best of them.

That’s not to say the coast is clear and a market bottom is guaranteed. It’s still early within a historically weak season for stock buyers. Many investors are also understandably waiting on a follow-through day to confirm a healthier market environment before new purchases are considered. So if you’re going to buy, you ought to buy smart.

With some stocks carving out durable bottoming patterns, here are 3 Nasdaq stocks to buy:

  • Netflix (NASDAQ:NFLX)
  • Vertex Pharmaceuticals (NASDAQ:VRTX)
  • First Solar (NASDAQ:FSLR)

But bear in mind the Nasdaq and lopsided influencers Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN) still have more base building to do before a truly sure-footed rally emerges.

Nasdaq Stocks to Buy: Netflix (NFLX)

Source: Charts by TradingView

The first of our Nasdaq stocks to buy is Netflix. The streaming video on demand (SVOD) champ has started forming a first-stage corrective base. The pattern is developing roughly 10% above a massive two-year long “W” formation, which the stock broke out of in mid-April to notch fresh, market-leading highs.

Currently, NFLX is working to establish a pivot low and third challenge of the 38% retracement level tied to the stock’s Covid-19 low. If the pattern is confirmed next week, another, smaller bullish “W” could be underway. And if oversold stochastics support the low by forming a bullish crossover, Netflix should be a great Nasdaq stock to buy with plenty of technical ammo to move aggressively higher.

Vertex Pharmaceuticals (VRTX)

Source: Charts by TradingView

The next of our Nasdaq stocks to buy is Vertex stock. Since breaking out in 2017 to new highs shares have channeled their way to greater gains. And since the start of 2020 the price action has turned more bullish and riper for buying.

A hammer pivot low formed off the 50% retracement level from VRTX’s March bottom was confirmed this week. Technically, this sets up a higher-low pattern for a new, steeper-but-manageable channel.

Coupled with a bullishly-aligned, oversold stochastics indicator, this is one Nasdaq stock to buy positioned for investors to act today.

First Solar (FSLR)

Source: Charts by TradingView

The last of today’s Nasdaq stocks to buy is First Solar. Shares of the solar giant don’t generate the noise of a motoring Tesla (NASDAQ:TSLA) or a hydrogen play like Ballard Power (NASDAQ:BLDP) these days. But don’t make the mistake of turning a blind eye to FSLR.

Technically, First Solar is forming a handle consolidation within a large corrective “W” base. The pullback has developed after shares hit new marginal highs in August following the company’s better-than-expected earnings release. It’s constructive and don’t let others tell you otherwise.

To be fair, FSLR’s price action also maintains the appearance of a double top pattern. But with shares up just 10% since 2014 and more than six full years of base-building under its belt, this Nasdaq stock to buy looks even better positioned for going long and big-time profits looking out into 2021.

On the date of publication, Chris Tyler did not hold, directly or indirectly, positions in any of the securities mentioned in this article.

Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. The information offered is based on his professional experience but strictly intended for educational purposes only. Any use of this information is 100%  the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.

The post 3 Nasdaq Stocks to Buy Off Their Corrective Bottoms appeared first on InvestorPlace.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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