Valeant Pharmaceuticals Intl Inc. (NYSE:VRX) stock technical chart flashes a buy signal.
The first of our 'Top Stocks To Buy Today' features Quebec, Canada based Valeant Pharmaceuticals Intl Inc (NYSE:VRX). Shares of the specialty pharma player have been extremely volatile this year. After starting 2017 at the $14 price levels, VRX stock price fell to a low of $8.5 in April before rising to just under $18 in July of this year. Given the huge swings which Valeant stock has made, it's hard to miss the mostly stable sideways movement since early August. To put it another way, Valeant stock seems to have entered a consolidation phase. However, if the Valeant stock technical chart is something to go by, VRX stock might be set for its next big move. Here is why.
The biggest proof of Valeant's consolidation has been the convergence of its key moving averages. Valeant's 20-day, 50-day and 100-day simple moving averages are all in the $14 range, with the 20-day moving average acting as a support while the stock faces resistance from the two longer term averages. However, the Moving Average Convergence Divergence (MACD) indicator, which is a popular momentum indicator used by technical traders has flashed a bullish sign, indicating that Valeant stock might be in for a move higher.
The MACD line rose above the '0' centerline, to complete a bullish centerline crossover. As explained by Investopedia, "When the MACD is above zero, the short-term average is above the long-term average, which signals upward momentum. The opposite is true when the MACD is below zero." The bullish centerline crossover follows an earlier bullish signal line crossover, which had occurred early last month. Given the recent consolidation and the bullish signals, Valeant stock price will likely see higher ground over the next few trading sessions.
Amazon.com, Inc. (NASDAQ:AMZN) stock enters oversold territory.
Shares of Amazon.com, Inc. (NASDAQ:AMZN), the Seattle, Washington based cloud to e-commerce giant have been in a steady downtrend ever since it reported disappointing earnings in July. While Amazon stock has been unable to shake off the bears, the stock looks set for a bounce. In other words, AMZN stock looks set for near-term upside. Here is why we think Amazon stock is a good short-term buy.
According to the Relative Strength Index, which is a popular momentum indicator used to identify oversold/overbought securities, the fall in Amazon stock price has taken the stock into oversold territory. The Amazon stock technical chart is currently flashing an RSI reading of 27.6, which is well below the threshold of 30 used to identify oversold securities. For context, Investopedia explains RSI as "Traditional interpretation and usage of the RSI is that RSI values of 70 or above indicate that a security is becoming overbought or overvalued, and therefore may be primed for a trend reversal or corrective pullback in price. On the other side of RSI values, an RSI reading of 30 or below is commonly interpreted as indicating an oversold or undervalued condition that may signal a trend change or corrective price reversal to the upside." In-line with the Investopedia explanation, Amazon stock looks set for a price reversal, implying near-term upside.
In addition to the bullish signal from the RSI indicator, the MACD indicator is setting up for a bullish signal line crossover. Any near-term momentum could see Amazon stock complete a bullish line crossover, which will be further confirmation of the near-term upside.
Nike, Inc. (NYSE:NKE) stock slips into oversold zone
The third 'Top stock to buy today' features Nike, Inc. (NYSE:NKE), the Beaverton, Oregon based footwear and apparel giant. Nike stock hasn't had the best of times this year, underperforming the broader markets with a 1.3% gain year-to-date. The stock is facing resistance from its key moving averages, the 20-day, 50-day and 100-day SMAs. However, the Nike stock technical chart is flashing some bullish signals, implying that the stock might be set for a breakout above these resistance levels.
The RSI reading for Nike stock is currently 26.1, clearly below the threshold of 30 used to identify oversold securities. As was the case with Amazon's sub-30 RSI, Nike stock also looks set for a near-term bounce. The case for a rise in Nike stock price is also strengthened by the Bollinger Bands indicator, which is another popular tool used by technicians. Nike stock price is currently trading below the lower Bollinger Band, which implies that the stock is now in the oversold territory. All in all, Nike stock looks set for higher ground over the next few trading sessions.
If you're looking for more such technical trading ideas, check out our daily trading ideas section. If you're also looking to discover fundamentally solid tech stocks, you should check out our top stock picks from the tech sector, which have beaten the NASDAQ by over 155%. Interested in automotive stock? Then, we also have our top picks from the auto sector, which have beaten the S&P 500 by over 285%.