Three Stocks that Could Bounce (DIS, SSO, IBB)
China is killing U.S. equities. The S&P500 is down more than 10% since last week. Taking it down with it are three of our favorite stock picks for 2015. They too have been knocked down at least 10% or more. We recommend taking a look at Walt Disney (DIS), iShares NASDAQ Biotechnology Index (ETF) (IBB) and the ProShares Ultra S&P500 (ETF) (SSO).
The correction appeared to be ending today until stocks reversed their course and turned lower. Mastery likes the IBB, SSO and DIS on any chance of a relief rally which we believe is coming. Once stocks do start to comeback you can play 2x the gains in the S&P 500 by using the ProShares Ultra S&P500 (ETF) (SSO).
We have said time and time again that BioTech is the future and the space to be in for 2015. You can accomplish this by investing in the iShares NASDAQ Biotechnology Index (ETF) (IBB)
Finally the Star Wars universe is going to cash in huge for Walt Disney Company (DIS) and we like the opportunity to buy this one on the pullback.
The question is when to take the risk and catch the bounce no these three equitiy plays?
Despite the doom and gloom we point out the following that the worst may soon be over:
"Key indicators reach required levels to go 'all in,'" Canaccord Genuity's chief U.S. strategist, Tony Dwyer, wrote in a Monday morning note. "With such pronounced weakness underneath the widely followed indices, we believe much of the global economic and Fed-related uncertainty is largely priced into the average stock, and now even the closely watched indices."
Dwyer had been waiting for four indicators to signal that it was time to take an aggressively bullish position on stocks: A jump in the CBOE Volatility Index to 20 or higher; a falling percentage of S&P 500 stocks above their short-term moving averages; weakening market momentum according to a separate technical indicator; and a declining number of bulls according to the Investor Intelligence newsletter writer survey.
"All four of our intermediate-term buy signals have hit required levels that surround a significant and sustainable low," Dwyer wrote.
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