As the crisis mounts in the Ukraine and Russia, and global markets feel the tremors, TheStreet’s market experts are looking at these “buy the dip” candidates this week.
Beyond Meat (BYND) $44.35. 5-day-performance (-14.98%)
It hasn’t been a very smooth ride for Beyond Meat (BYND) lately. “The stock has been getting thrashed as volatility in the market remains high, TheStreet’s Bret Kenwell reported.
Even worse, a bear market in growth stocks has really made life tough for investors in the El Segundo, Calif., producer of plant-based meat.
Beyond Meat reported earnings after the close on Thursday. In the numbers, the company reported a slight year-over-year decline in revenue, which missed analysts’ expectations. For a growth stock, that’s not good news.
“Beyond Meat has been in a relentless decline — a bear market of its own,” Kenwell said. “We talked about this a month ago, as the shares were trying to rally off the January low.” Instead, the stock ran right into the declining 50-day moving average and was rejected. Now it's hitting new lows.
Consequently, it’s no surprise that Kenwell reminds traders the stock is in a “brutal” downtrend. One caveat or silver lining isn’t going to change that and it’s not going to make it a safe holding going forward.
“If we see some further short-covering, let’s see whether Beyond Meat stock can reclaim the Covid low from March 2020 at $48.18. Above that puts $53 in play and the declining 10-day moving average,” Kenwell said. “A real jolt higher unlocks the 21-day, then active resistance via the 50-day moving average.”
Block (SQ) (formerly Square) $119.78. 5-day performance up 23%.
With Block (SQ) beating earnings estimates Thursday, and rallying strongly late last week, TheStreet’s Bruce Kamich is taking another look at the long-suffering stock.
Earnings clocked in at with an adjusted earnings-per-share (EPS) that bested analyst forecasts. Revenue barely met estimates, rising 29.1% on a year-over-year (YOY) basis, but gross payment volume (GPV) slid in at $46.3 billion, which exceeded expectations.
“We reviewed the charts of Block (formerly Square) on February 1 and wrote that "Durable bottoms can take time to develop while a tradable low needs less evidence,” Kamich said. “The decline in the price of SQ has slowed with a spinning top on the candlestick chart. This gives us a couple clues that a price low has been made. Aggressive traders who are comfortable with playing a bounce can be buyers while investors who are less agile should wait for a bottom pattern to develop."
Recently, SQ prices made a "key reversal day" as the broad market rebounded to the upside.
“After that, share prices have gapped higher and are a lot closer to the declining 50-day moving average line,” Kamich noted. “The On-Balance-Volume (OBV) shows a recent ‘uptick’ and the 12-day price momentum indicator continues to show a bullish divergence as downside momentum has waned.”
Kamich’s bottom line strategy on Block? Be patient and wait for an opportunity.
“Traders looking to buy SQ should wait on a partial dip into the gap - perhaps to $105 to do some buying,” he said. “Without a developed base I would consider SQ a short-term trade for now.”
Mattel (MAT) $25.53. 5 day-performance 2.42%.
In a recent "Executive Decision" segment the Mad Money program, Jim Cramer spoke with Ynon Kreiz, chairman and CEO of toymaker Mattel (MAT) which reported blowout earnings that included top- and bottom-line beats with double-digit sales growth and expanding gross margins.
“Kreiz proclaimed the turnaround at Mattel is now complete and the company is returning to growth mode,” TheStreet’s Bruce Kamich noted. “He said his company's balance sheet has been fixed, their brands have been reinvigorated and Mattel is focused on monetizing intellectual property with digital entertainment.”
On January 13, Kamich noted high volatility with Mattel stock, "The charts of MAT have swung from bullish to bearish and back again,” he said. “Traders could go long MAT on strength above $23.50 or above $24. The $33 area is our first price target. Risk to $19 for now."
Six weeks later, there’s more clarity on the stock.
“Looking at the daily bar charts, we can see that MAT shares didn’t break above $23.50 until this month,” Kamich said. “MAT rallied towards $26 and has recently pulled back, correcting the rally from late January. The stock is trading above the rising 50-day and 200-day moving average lines.
Kamich sees a significant upside price target in Mattel. “In the short-run, MAT might pull back closer to the breakout level around $23.50, but after that correction is over we would expect further gains to the $36 area,” he said.
