Chris Tyler
·3 min read
Fearful headline risks are finally fading and we’re now two weeks into a new rally. A dozen or so percentage points from March’s corrective low in the Dow Jones, S&P 500 and Nasdaq, and you might think you’ve missed out on a big opportunity in blue-chip stocks to buy. Fortunately that isn’t the case.
While it’s true the biggest and most influential mega-cap heavyweights like Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA) have rallied around the market’s new bull leg, many top, blue-chip companies that we rely on daily are still just waiting to be picked up.
With that said, let’s take a look at three longer-term price charts of blue-chip stocks that are “still” oversold:
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Blue-Chip Stocks to Buy: PayPal (PYPL)
Source: Charts by TradingView
It’s easy to appreciate why fintech giant PayPal is first on our list of blue-chip stocks to buy.
Many blue-chip investors are likely happier today that the market is back within 5% to 10% of all-time-highs (and it’s still flirting with richer valuations). Yet PayPal’s shares are trading at a historically low valuation alongside rising total payment volume and an ecosystem that stands to benefit from inflation.
Are there risks? Sure. But this looks like a more certain disconnect in the blue-chip stock. (This happens more often than we’d like to believe). Then there’s PYPL stock’s monthly chart which pretty much speaks for itself.
Breaking it down, PayPal’s hammer candlestick placed outside the lower Bollinger band, supportive lifetime test of its 76% retracement level and oversold bullish stochastics crossover make this blue-chip stock a screaming buy.
I’d begin a longer-term commitment to this blue-chip stock with an actively managed May $110/$135 collar.
Netflix (NFLX)
Source: Charts by TradingView
Shares of streaming giant Netflix remain down 35% in 2022 as investors ponder post-Covid-19 screen time versus more time outdoors. January’s haircut to guidance hasn’t helped the case for NFLX stock much either.
The stock plummeted 21% following its fourth-quarter results. But Wall Street is nearsighted and looking at the trees rather than the forest in this blue-chip stock.
The big picture and certain, albeit slower growth and brand dominance are intact. And that’s even if you have no idea what all the hubbub is over its numerous hit new series.
Technically, this blue-chip stock’s monthly price chart reveals that January’s horror show has turned into a more actionable buying opportunity. After three months of oversold price action testing long-term trends (Fibonacci and Bollinger band support), NFLX shares are putting the finishing touches on a bullish doji / hammer candlestick.
Consider waiting for stochastics to cross, then buy a slightly out-of-the-money May bull call spread to get through late April’s earnings event to ensure a happier risk-adjusted ending in this blue-chip stock.
Blue-Chip Stocks to Buy: Moderna (MRNA)
Source: Charts by TradingView
The last of our blue-chip stocks to buy today is Moderna.
Technically, the monthly Bollinger band isn’t in play like it is with NFLX and PYPL. But the lower band’s steady rise (indicated by the green arrow) is a positive indicator. There’s a lot to like about this blue-chip stock when you couple that with the fact that there’s a higher volume bullish hammer stationed within a band of deeper Fibonacci pattern support and flattening oversold stochastics.
Here, I’d wait for April to come on the board to confirm the March candlestick. Should that condition be met, a modestly out-of-the-money intermediate-term vertical in lieu of buying MRNA stock is the favored approach.
One such combination that looks reasonable off and on the price chart is the Sept $200/$230 bull call spread.
On the date of publication, Chris Tyler did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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