Stocks waving a red flag could be a buying opportunity
A handful of stocks are waving a bearish technical red flag.
Take-Two Interactive, Biogen, and Amazon are among the names that have seen or could approach their 50-day moving average below their 200-day – this technical signal known as the Death Cross suggests potential pain ahead for active.
But, it could also present an opportunity for investors looking to buy when weak.
“Take-Two is the quintessential video game studio, and yes, it is selling because of the high sugar levels after the pandemic. But in the long term, Grand Theft Auto 6 will be released, which will likely be the biggest blockbuster. hit in the history of the game, “Boris Schlossberg, managing director of FX strategy at BK Asset Management, told CNBC’s” Trading Nation “on Wednesday.
Rockstar Games, owned by Take-Two, has not officially confirmed GTA 6. The latest one, GTA 5, was released in 2013. Its other profitable franchises include Red Dead Redemption.
“Any smart investor is going to buy the downside at this point, because over the long term I think the outlook with Take-Two is very, very, very strong,” Schlossberg said.
Take-Two entered on a death cross at the end of April when his 50 days passed under 200 days. Shares are down nearly 20% this year.
Gina Sanchez, CEO of Chantico Global and Chief Market Strategist at Lido Advisors, is betting on Amazon despite its recent weakness.
“It’s a staple in our portfolio at Lido Advisors, in part because the e-commerce trend was already well established before the pandemic – the pandemic has just attracted the latest adopters and forced them to party – but they also have their game in the cloud, which was up 32% this quarter, and you can’t ignore it, ”Sanchez said in the same interview.
Amazon has yet to enter a death cross, although the two trend lines are getting closer. Its 50 days are under $ 3,207 and its 200 days are just over $ 3,201. The shares are less than 1% higher for the year.
“Even though we’re seeing some setbacks, which I think is natural, I think this title still has a lot of wiggle room,” Sanchez said.
Disclosure: Lido owns AMZN.