10 Granny-Shot stocks to buy technically after January’s decline

Key Takeaways

• NVDA, TSLA, VRSN, QRVO, PYPL, AMZN, GRMN, PCAR, CSCO, KLAC look interesting to buy technically following the broader market weakness in January
•  Technically speaking, many of these stocks have been unfairly punished to the tune of -10-30% declines off their all-time highs.  Yet most patterns show short-term weakness only as part of sound intermediate-term bullish structure
•  Rallies look likely in all of these between now and March which should help many recoup some of their recent weakness 

Granny Shot Stock List with Support and Resistance 
(ST= Short-term, IT=Intermediate-term)

NVIDIA (NVDA- $243.19)  NVDA selloff has presented a very attractive risk/reward opportunity to buy this stock technically just as it’s coming into good technical support.  Weekly charts show it is near 30% decline in just over two months’ time as being part of a larger uptrend from recent years.  Thus, while NVDA became quite overbought into last November, recent weakness has helped to alleviate these stretched conditions, making this quite appealing technically.   Moreover, the pullback has brought NVDA 3.79%  down to a near 50% retracement to the entire rally from 2018 as well as 38.2% Fibonacci retracement of the rally from last Spring.  Overall, buying dips in NVDA looks attractive, with initial upside targets found at 271 and then 283 into mid-March.  Movement above would suggest a rally back to new highs should occur.

Tesla (TSLA- $923.32)   Tesla also stands out as being attractive, despite having given up over 30% in value in just the last few months.  As shown, this pullback represents a 61.8% Fibonacci retracement of the rally from last May.  Additionally, its recent drawdown almost hit a perfect 38.2% of the entire run-up from 2019 lows. Its pullback has unfolded as an “ABC” type Elliott-wave pattern, which is apparent given the very visible three-wave initial decline from last Fall.  Overall, a rally back to new highs is likely, and owning TSLA -1.42%  under 950 makes sense for an upcoming bounce up to initial resistance at 1048, which looks important. Over this could lead to 1205, while on the downside, 794 is a key level to hold on any drawdown, as under would postpone the rally, leading down to 736 before this can rally.  Overall, this looks attractive here technically, and buying dips looks appealing.

Verisign (VRSN- $218.43) Recent pullback should constitute an attractive opportunity for buying dips.  Weekly VRSN charts show its breakout into late December having come back to life in recent weeks, as VRSN pulled back from its extended state.   Its drop from $257 to $204 caused momentum to drop to daily oversold levels, while weekly momentum is now rather neutral.   Its broader pattern still represents a two-year bullish base, which gave way to a breakout last year.  Thus, this recent weakness from December looks temporary only and has not been sufficient to jeopardize its intermediate-term technical pattern.   The revisiting of the area of VRSN’s breakout should present a chance to buy dips for strength in the weeks ahead, and $204 stands out as a key area of support that needs to hold for this thesis to play out.   Upside resistance lies at 237, then 257, which could cause a stalling out in its rally, though movement above 257 likely leads up to $283.  Overall, long positions look preferred here barring a break of $204, which would postpone the rally. 

Paypal (PYPL- $126.08) PYPL has suffered an extreme 60% correction in price within the last seven months but shows some key technical developments that merit buying into this decline for an above-average bounce into March/April.  As shown, PYPL -1.11%  fell from 310 last July 2021 to recent lows right near $125, a substantial bout of weakness that has caused momentum to nosedive to extreme oversold levels on weekly charts.  Elliott-wave patterns from last Summer show this to be a likely 5th, or “Final” wave down on this decline, but given this week’s gap, there could be a bit more weakness into next week before this decline has run its course. Evidence of counter-trend exhaustion has also now begun to surface using DeMark’s TD Combo indicator which has just confirmed a TD 13 countdown on daily charts, while weekly charts are potentially one week away.  Thus, while momentum is very sharply negative, there are reasons to expect this might bottom out here and show at least some kind of bounce over the next 4-6 weeks.   Downside support should materialize near 118-124, or near a 38.2% absolute Fibonacci retracement of all-time highs.   This level also lies near prior peaks from 2019 and early 2020. Initial upside targets lie near 179, then 193, while above that allows for a push up to $215. 

Qorvo (QRVO-$128.72)  QRVO looks appealing from a counter-trend perspective following its drop to just above a meaningful support zone at $119-$122.  This represents important Fibonacci retracement level that happens to coincide with former peaks in price that happened back in early 2020.    Like quite a few stocks mentioned here, QRVO falls into the category of stocks that have fallen more than 30% within the last six months but maintains an attractive intermediate-term uptrend.   Following a very sharp rally into last Summer 2021, QRVO peaked out near a time when the broader market also showed some evidence of topping.  Its pullback has proven quite substantial in percentage terms, but momentum is now oversold, while the stock is trading near key levels that are likely to hold on this initial dip.   Long positions are favored, expecting a bounce to 154, with more meaningful resistance at 162, which lines up with a 50% retracement of its most recent decline.  $119 represents a stop for trading longs, but is not expected to be broken on this first pullback from last August’s peaks in 2021.

Amazon.com – (AMZN- $3152.79) AMZN joins the growing list of stocks that have trended down sharply, yet now appear to be stabilizing and starting to rally after having shown little to no long-term technical deterioration.   As the weekly logarithmic chart shows of AMZN -1.11%  going back since 2016, this recent breakdown into late January got down to more meaningful levels of intermediate-term support.  Over this past week, its post earnings bounce has been helpful in allowing momentum to start to trend back higher and the stock now lies at important three-month trendline resistance near 3200.  This area also is important given two prior lows from last August and October that lie right near 3200.  Overall, rallies look likely over the next 4-6 weeks and any daily close back over 3428 would have little resistance until all-time highs near 3800.  On the downside, while not expected to be tested right away, the area at $2700 from last week’s lows is very important, representing a 38.2% Fibonacci retracement level of the 2020-2021 rally, 

Garmin Ltd. (GRMN- $124.76) GRMN 0.43%  looks attractive to buy here technically after its sharp 30% drop in the last five months since September 2021’s peak.  GRMN’s weekly momentum (Based on RSI) has finally reached oversold levels just as it hovers above meaningful support at 105-110.     Counter-trend exhaustion signals are now present on Daily charts, while weekly signals still require another 5-7 weeks potentially from appearing on weekly.  Yet, the stock now lies directly above a very important spot near former February 2020 peaks at $105.58, which should provide very strong support on any remaining weakness.   Furthermore, GRMN’s pullback has now finally hit an important 50% retracement of its former rally, which saw the stock triple in price between March 2020 and September 2021.  Its former overbought conditions have been erased on this recent pullback, and the stock appears like a much better risk/reward technically to buy for an upcoming bounce.  Initial resistance lies near 134 and then 140, which should have importance on rallies over the next 4-6 weeks.  

Paccar (PCAR- $94.53) Bullish, and PCAR’s resilience in holding up during a time when most US indices experienced weakness in January likely should lead to an upcoming test and breakout above January 2021 peaks at $103.19.  While the stock failed to make much progress over the last year, its longer-term uptrend remains intact, and its rally off the 2020 lows resulted in a breakout of its lengthy intermediate-term base, which resulted in a more than doubling of the stock price between March 2020 and January 2021.  Following a minor pullback from January to October 2021, PCAR 0.13%  has turned back higher by over 20% in just the last four months.  Weekly momentum is upward sloping and not overbought.  Furthermore, structurally, PCAR maintains a bullish pattern, which should help drive this stock up to 105 and then 110 without too much trouble.  Support on declines lies at $81 and needs to hold to keep the bullish thesis intact.

Cisco Systems (CSCO- $55.15) CSCO’s January pullback failed to do much technical damage, and after a 10% decline, CSCO looks to be right near key uptrend line support as well as the pivot area to its larger breakout.  Technically, rallies look likely in the next 4-6 weeks to carry CSCO higher to challenge its December peaks at $64.29.  The ability to get over that would allow for a larger intermediate-term gain to test all-time highs from March 2000 near $82, which occurred more than 20 years ago.  Pullbacks face support at $48-51 with 48 being important support to this rally thesis.  Overall, momentum remains positively sloping and not overbought, and CSCO looks quite attractive technically to continue the most recent rally that began back in October 2020.

KLA Tencor (KLAC- $377.38)  Bullish, and recent weakness should present an opportunity to buy dips for a push back to new highs.  Despite a 24% decline in just a couple weeks in January, intermediate-term trends have not been broken.  KLAC continues to hold an area near its trendline support from late 2020.  This pullback has helped to alleviate KLAC’s overbought status, and it appears like an appealing risk/reward given the weakness down to key levels.  Movement back to $413 looks likely, then 432, 457, while strong support lies at $344.  Only a weekly decline back under $344 would postpone the bullish view, and rallies look more likely than pullbacks into the end of Q1.