While trade war hobgoblins may continue to haunt stocks this summer, we must consider the possibility that the recent market drop was a ruse. And by ruse, I mean a temporary pullback designed to scare the children before the market powers to new heights. In any case, there are still plenty of strong stocks to buy.
Indeed, some escaped the market jitters with uptrends intact and new highs in reach. One recurring theme of the best stocks to buy on my watchlist is software. Today’s trio of breakouts all hail from the same sector and industry. They boast growth metrics that Wall Street has been rewarding with big-league gains, and I see no reason why the gravy train won’t continue.
If anything, the recent turmoil has allowed sweet-looking bullish patterns to develop in these names providing lower risk entries for new trades.
Let’s take a closer look at some notable software stocks to buy now.
2019 is turning into a banner year for Shopify(NASDAQ:SHOP). The Canadian-born e-commerce company is up 96% year-to-date and boasts one of the best looking price trends on the planet. Last month’s earnings announcement threw gasoline on the fire, sparking a resurgence in momentum.
Last week’s pullback was met by aggressive buyers at the rising 20-day moving average. The three-day follow through we’ve seen since has been relentless. And this morning’s jump is pushing SHOP stock to a new record high.
Throw it all together, and SHOP remains one of the best stocks to buy on the Street. If the price tag gives you pause, then consider using bull call spreads such as the July 270/290, which you can buy for around $9.
MongoDB (NASDAQ:MDB) scored one of the cleanest looking breakouts in the market yesterday. It cleared the descending trendline that has defined its behavior for the past two months. The resistance breach signals MDB stock is done resting and is ready to rise anew.
The gap and run following its March earnings release shows buyers are willing to chase the stock at any price. It takes some serious firepower to push a $100 stock to $155 stock in a little over a week. And if yesterday’s pop and this mornings follow through is any indication, I think we’re going to see another strong push to new highs.
Implied volatility is juiced for MDB options so if you’re using derivative for your bet, try bull puts. You can sell the Jun 130/125 bull puts for $1.25 credit.
Okta (NASDAQ:OKTA) is a San Francisco-based cloud software company that is up 73% year-to-date. Its shares barely budged during last week’s market plunge, and it is breaking to record highs as I type. It has a long history of rewarding breakout buyers, and I suspect this morning’s resistance breach will prove no different.
With rising 200-day, 50-day and 20-day moving averages, bulls are dominating across all time frames. And volume patterns are largely supporting higher prices with many accumulation days in recent months.
Don’t overthink this one. The case for higher prices is solid. The next earnings announcement looms on May 30 and is the big X-factor that could disrupt what is otherwise a textbook bullish chart.
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