For this week, lets take a look at two Technology stocks I have long positions on and I predict they can go higher in coming weeks. Given how the Tech and Semiconductor sector XLK & SOXL respectively have been on a bull run this year, there may still be more room to run for the latter half of the year.
MU - Micron Technology
After reporting record breaking sales and profit this year, Micron Technology has been up almost 35%+ for the year. The DRAM and NAND memory chips manufacturer benefits a lot when the demand is stronger for Mobile & PC. I believe the demand will continue this year. Given that there is a lot of competition in the commodity hardware space once has to be careful not getting attached to these stocks or any other within the sector without proper due diligence as the sector is very cyclic in nature.
From a technical perspective, MU has been on a beautiful uptrend continuation channel where every test to the lower end of the channel found buyers ready to gobble up shares. As a result stocks has rallied 35%+ for the year.
Notice how Elasticity has been positive for the past 7 months and has never gone below 0. Most recently it met with resistance at $32 area and got rejected twice. However, $29 support is still holding.
I have a long $29 position with risk around $28. In coming weeks I'm expecting $32 test to take some profit and possibly a break through that resistance.
Click here for 30 days free trial.
NTNX - Nutanix, Inc.
I remember when NTNX went Public in 2016 (opened 130%+) and CEO went on CNBC and said he is looking for true health of the stock which was a subtle hint that it's currently way overvalued. Then NTNX wasn't profitable and bleeding cash like any other typical Tech IPO (Hello SNAP!!) that the enablers (book runners + analyst + mainstream media) hype up and sell to public.
After the dismal earnings results in March and lock up expiration, I took a short position around low $22 but of course covered too early around $19 area when my target was mid teens. Hindsight is always 20/20 they say.
Now looking at NTNX nine months after IPO where stock dropped 3x from the high of $46, the true health of the stock which NTNX CEO was longing for then seems to be around high teen range in my opinion. The recent partnership with Google and the customer growth in Canada has warranted a second look in NTNX as it's bringing back new and old buyers pushing the growth narrative again. Additionally, there does seem to be lot of short sellers betting against the stock and if positive news cycle from past week continues, mini squeeze is likely.
From a technical standpoint, $20 seems to be the area where bears take control as the stock has gotten rejected twice in the past month or so. However, support seems to be holding nicely and we continue to see lower high formation in the same period.
Elasticity turned positive two weeks ago and has been sustaining. These two technical indicators are pointing that we may test $20 again in the next few weeks and even break through that to retest mid $20 area which is what I'm betting on. I have a long swing position in NTNX with risk around low $18 area and I'm expecting a $20 test to take profit.
Click here for 30 days free trial.
Both positions were closed out two weeks later. MU up 38% | NTNX up 140%
That's it for now folks. I hope you found this blog post informational. Happy and profitable trading for next week.
Finally, If you haven't already tried the BuySellShortCover platform and you're interested in finding highly actionable trading ideas everyday like the ones in this blog post, sign up for an account at buysellshortcover.com, our idea generation platform. We're currently offering a 30 days free trial.
Feel free to contact us if you have question, comments, or feedback by visiting buysellshortcover.com/contact
Image credit - foolcdn.com | disclaimer.
Additional Disclosure: I own shares in both MU and NTNX and this article isn't a solicitation to buy either of these securities but strictly for educational/entertainment purpose only. I or BuySellShortCover assume no responsibility if readers plan to buy any of the aforementioned securities. Readers bear responsibility for his/her own investment decision. Stock trading/investment can cause loss in capital and you should always consult a professional financial advisor.