Growth Stock Meltdown: ROKU and PYPL vs. NVDA and TTD
Lots of blood in the water so let's decide where to buy some December gifts.
Holy overvalued price-to-sales ratio Batman! These stocks are going down!
In today's Cook's Kitchen, I take a look at the bloodbath in our favorite growth machines, from Roku ROKU to PayPal PYPL.
I also explain why I'm confident about where I can buy PayPal, but not so sure about Roku.
Just as important, I explain how to buy any of your favorite ideas as they are coming down.
For instance, I want to be a buyer of PYPL above $170. And I'm so confident, that I'm willing to put a limit buy order in my account to capture the next flush.
Why is this so important? Because during crushing sell-offs in growth stocks, the algos will push hard to trigger all the stop-loss orders.
And this means that when you get that last spike down, it will come quick and reverse before you can say "I knew I shoulda had a buy order in there!"
Where's the Strength in This Market?
Then there's NVIDIA NVDA and The Trade Desk TTD. In the video, I show a table of relative strength for about 30 top growth stocks as of last week. It comes courtesy of Chris Perruna's Twitter feed, @cperruna, where he ran a 3-month relative strength screen using MarketSmith.
In the top of the heap were two of my favorites, NVIDIA and The Trade Desk. I'm still holding NVDA with a cost basis near $100 with no fear of giving back some profits.
And in TTD -- who I call the "CME of Advertising" -- we just took 120% profits last month. So I'm looking to buy inside $90-95.
Finally, Shopify SHOP was holding up pretty well too at the end of last week with a relative strength rating of 88, right there with Apple busting new highs.
But this week it's down another 7% from all-time highs above $1700. I'm getting ready to buy some Shopify if shares slip under $1425.
One more thing: In the video, I also talk about what I think the extent of this corrective action will be for the S&P 500 and where this whole sell-off turns around again to close the year on a high note.
Actually, two more: I mentioned my discussion with Tracey Ryniec on her MarketEdge podcast Tuesday. Here's that link...
Growth Stock Sell-Off: What Should You Do?
Tracey and I discuss PINS, PTON, LULU, RH, EXAS and more in that 30 minute episode.
Disclosure: I own shares of NVDA and PINS and may be buying PYPL and TTD soon.
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NVIDIA Corporation (NVDA): Free Stock Analysis Report
PayPal Holdings, Inc. (PYPL): Free Stock Analysis Report
Shopify Inc. (SHOP): Free Stock Analysis Report
The Trade Desk (TTD): Free Stock Analysis Report
Roku, Inc. (ROKU): Free Stock Analysis Report
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