The Federal Open Market Committee cut their target rate for the first time in a decade as expected.
But comments by Fed Chair Jerome Powell during the news conference put into question whether we’ll actually see further easing.
Rather than getting bogged down in a game of will-they-won’t-they, let’s keep things simple.
The silver lining of Wednesday’s beatdown is it pushed many recent earnings winners back to low-risk entry points.
My watchlist is littered with potential buy-the-dip candidates.
Here are three of the best stocks to buy in the aftermath of the Fed.
Stocks to Buy After the Fed: Twitter (TWTR)
Twitter (NYSE:TWTR) finds itself amid bullish earnings and price trends. The past two quarterly reports saw better-than-expected numbers, and its price trend has been trending higher. Last week’s boost was particularly potent, driving TWTR stock to a new 52-week high.
The follow through seen since has been impressive and speaks to buyers’ willingness to pay up even after the post-earnings pole vault.
With the positive underlying fundamentals, future weakness in the stock should prove fleeting. I like selling naked puts for the next few months to score some cash flow.
Sell the Sep $38 put for around 55 cents.
The theme of powerful earnings gaps continues with our next pick. Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) has a history of the direction of its jump following earnings signaling the price trend for the quarter. Down gaps have usually sparked multi-month downtrends while up gaps have kick-off or accelerate uptrends.
I’m betting last week’s pop will prove no different. The robust earnings beat that drove traders to push GOOGL stock up 9% in a single session will likely continue to support the stock moving forward. And that makes GOOGL a tempting buy into any weakness, like the past three trading sessions. Compared to the beatdown elsewhere, yesterday’s post-Fed slip in Alphabet shares was nothing.
To bank on our bullish bias, let’s sell a Sep $1150/$1140 bull put spread for $1.40. Consider it a bet that GOOGL sits above $1,150 at expiration.
My final pick for stocks to buy in the aftermath of the Fed is Snap (NASDAQ:SNAP). The rationale for its inclusion mirrors that of its predecessors. Its uptrend is bangarang and last week’s earnings reaction simply added fuel to an already raging fire.
SNAP stock’s year-to-date gains have now climbed to a mouth-watering 213%, and we still have five months to go. Chasing stocks after such a monster move post-earnings is challenging, but that’s what makes this week’s three-day retreat so appealing. It’s providing a lower-risk entry for traders hesitant to pile in after the strong up-gap.
Today’s bullish candle is confirming buyers’ dip-buying desires, suggesting now’s the time to enter. The cheap price tag of SNAP makes it a compelling candidate for naked puts. Sell the Sep $15 put for 35 cents.
— Tyler CraigRogue Stock Trader Delivers Market-Crushing Returns for 20 Years [sponsor]
Louis Navellier has a track record that’s the envy of Wall Street. For over 20 years he's outperformed the market and discovered Apple at $4... Oracle at $6... and Amazon at $40 along the way. Here's what he's saying to buy now.
Source: Investor Place