3 Tech Stocks to Buy in the ‘Green Zone’
With top names in the tech sector rallying lately, you may be curious to know which are the tech stocks to buy.
One way to get started is through TradeSmith. TradeSmith offers investors valuable tools for determining which stocks to buy. A good example is its Health Indicator feature. This comprehensive indicator provides an overall picture of a stock’s current health.
Using this metric, you can quickly find potential opportunities to explore. Broken down into three “zones” (green, yellow, and red), you’ll have a general idea about whether it’s best to be bullish, bearish, or neutral on a particular stock.
As you may have guessed, stocks in the “Green Zone” are performing well, with little indication that the trend is on the verge of shifting.
A stock in the “Yellow Zone” has corrected by more than 50% of its volatility quotient (VQ), a proprietary TradeSmith metric that helps measure a stock’s risk. When a stock in your portfolio goes from green to yellow, it may be a good time to reassess whether to maintain the position.
Stocks entering the “Red Zone” have corrected by more than their calculated volatility quotient. VQ can be useful when adding stop losses to your positions. View any move into the “Red Zone” as a warning sign to exit your position for now.
These three tech stocks to buy are currently in the “Green Zone.”
Apple (AAPL)
Apple (NASDAQ:AAPL), one of the top tech stocks to buy, recently became one of the “Green Zone” stocks, having entered the “Green Zone” just over a week ago. Shares in the iPhone maker initially stumbled at the start of November, following the release of results for the quarter ending Sept. 30, 2023.
Mostly, due to the company’s underwhelming guidance for the current quarter. However, since then, AAPL stock has gotten back on an upward trajectory, suggesting investors are focusing now more on the tech giant’s solid results, and the prospect of demand for the company’s products and services continuing to bounce back.
As CEO Tim Cook discussed in the earnings release, Apple reported record iPhone and Services sales for the quarter. Earnings per share jumped 13% year over year, and results came in ahead of sell-side forecasts. TradeSmith’s volatility quotient for AAPL is 22.3%, which makes it a medium risk stock.
Salesforce (CRM)
Salesforce (NYSE:CRM) has been in the “Green Zone” for over five months. Like other tech stocks, shares in the enterprise software provider pulled back slightly during the late summer and early fall, as macroeconomic concerns like high interest rates and a possible 2024 recession weighed on the markets.
Yet with investor sentiment bouncing back, CRM stock has begun climbing back toward its 52-week high. Salesforce’s next earnings results may bode well for shares from here. Why? Although analysts have already upped their forecasts for last quarter, the company could still report an earnings topper.
If Salesforce beats these forecasts, provides an upward revision to full-year guidance, or unveils more details about its efforts to capitalize on the generative AI trends, current price trends may continue following earnings. TradeSmith’s volatility quotient for CRM is 28.47%, which makes it a medium risk stock.
Yelp (YELP)
Yelp (NYSE:YELP) has been in the “Green Zone” for over five months. So far this year, shares in the consumer review portal operator have performed strongly, which has made it one of the tech stocks to buy. This comes following an extended period of underperformance during 2021 and 2022.
What’s been driving this strong performance for YELP stock in 2023? While at first zooming higher after the emergence of activist investor involvement in the stock back in May, the reporting of strong quarterly results and updates to outlook have helped to extend this rally.
Even as YELP has rallied by roughly 60% year to date, given improving results, a relatively low valuation (13 times forward earnings), and the continued push from the above-mentioned activist to sell the company, present trends could continue. TradeSmith’s volatility quotient for YELP is 31.66%, which makes it a high risk stock.
The TradeSmith Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
