The Third Big Bounce-Back Stock of 20

By Murray Dawes, Saturday, 22 July 2023

In a previous Closing Bell video, I suggested Megaport and Spotify as ideas for tech stocks. However, we are in the middle of a storm and may have further volatility to withstand as growth slows. 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…

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.

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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

All advice is general advice and has not taken into account your personal circumstances.

Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

Murray Dawes is our resident expert trader and portfolio manager. He is a former Sydney Futures Exchange floor trader who went on to design custom trading systems and strategies for ultra-wealthy clients (including one of Australia’s richest families). Today, his mission is to help ordinary Aussie investors make profitable investments, while expertly managing risk.

He uses his proprietary system for his more conversative and longer-term-focused service Retirement Trader

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All advice is general in nature and has not taken into account your personal circumstances. Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

The value of any investment and the income derived from it can go down as well as up. Never invest more than you can afford to lose and keep in mind the ultimate risk is that you can lose whatever you’ve invested. While useful for detecting patterns, the past is not a guide to future performance. Some figures contained in our reports are forecasts and may not be a reliable indicator of future results. Any actual or potential gains in these reports may not include taxes, brokerage commissions, or associated fees.