A few months ago, I did a Closing Bell video on Megaport [ASX:MP1] as a tech stock for your bottom drawer. It is up by nearly 70% since then.
I also gave you Spotify [NASDAQ:SPOT] as a trade idea a couple of months ago and it is up 20%.
Both stocks had similar technical setups in that they had seen steep selling pressure for a long time, and they looked like they were turning a corner.
There are many such stocks out there that have been beaten up badly over the past couple of years, and a window may be opening to pick up a few former market darlings at a discount.
It’s been nearly two years since the market peak was reached. If you look back at history, that is often the time to be buying stocks rather than offloading them.
We are still in the middle of a storm and may have further volatility to withstand as growth slows. But as the strong rally in US equities is showing, the market can go up even when it makes little sense to us.
In today’s Closing Bell, I show you another stock that has suffered a huge drawdown in its price. However, a recent positive announcement has brought the buyers back in.
The technical situation looks interesting to me so I reckon it could be a good high-risk punt for those with the stomach to buy a stock that has crashed in price over the past few years.
Until next week,
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Murray Dawes,
Editor, Money Weekend
