3 Top Tech Stocks to Trade Right Now

Source: Shutterstock

Large-cap tech stocks have led the great market rebound of 2019. Today we’ll look at three of the top stocks to trade in the sector.

Chart watchers are detectives seeking clues. These signals reveal the path of least resistance for prices and enable traders to discover attractive buy points that offer low risk and high reward. In analyzing the technology sector, two items stand out that suggest it should maintain a leadership role.

First, unlike the S&P 500 and Russell 2000, the tech-heavy Nasdaq saw increasing momentum on its last upswing. Trends with growing momentum have a higher likelihood of continuation than reversal. The second piece is related to the first: the tech sector’s relative strength. The tech sector’s outperformance is a good omen that should continue attracting performance chasers.

Here are three top stocks to trade.

Click to EnlargeSource: ThinkorSwim

Advanced Micro Devices (AMD)

Advanced Micro Devices (NASDAQ:AMD) is an active trader’s dream stock. Its massive volatility delivers quick profits to those on the right side of the trend. And it exhibits clean trending behavior responding well to common support and resistance zones.

Last week’s breakout resulted in a rapid three-day 20% surge amid heavy accumulation. Spectators who missed it now have a second chance. With this week’s pullback, AMD stock has now returned to the scene of the crime. This is as good a buy-the-dip pattern as there is. Watch for signs of an upside reversal such as breaking a prior day’s high, then buy.

Options traders might consider selling the May $22 puts for $90 of cash flow per contract.

Click to EnlargeSource: ThinkorSwim

Alphabet (GOOGL)

This year’s uptrend in Alphabet (NASDAQ:GOOGL,NASDAQ:GOOG) has been incredibly orderly. The series of higher pivot lows is consistent, and both the 20-day and 50-day moving averages are rising in bullish fashion. Additionally, the past three upswings have seen strong bullish candles with upside follow through. This type of clean price action has made GOOGL one of the easier stocks to trade of late.

With today’s mild selloff, GOOGL stock is working on its fifth down day in a row. The lower-than-average volume suggests we’re seeing garden-variety profit taking versus widespread distribution. Potential support looms close at $1150 and $1140, so I suspect a bounce is nigh.

If the stock can take out today’s intra-day high ($1,177), then buy the May $1175/$1195 bull call spread for around $5.

Click to EnlargeSource: ThinkorSwim

Microsoft (MSFT)

Microsoft (NASDAQ:MSFT) rounds out today’s trio with a shallow retracement pattern. The software king notched a fresh record high last week — $120.82 — on strong momentum. The reach to new heights came following a high volume breakout of last year’s high water mark.

Given all the bullishness, I see little reason why the current dip won’t get gobbled up like all its predecessors.

Implied volatility is low making long option plays attractive. I like buying the May $115/$125 bull call for around $4.

As of this writing, Tyler Craig held bullish positions in AMD. Check out his recently released Bear Market Survival Guide to learn how to defend your portfolio against market volatility.

Source: Investor Place

The 12% Dividend Stock Trump Wants You to Buy

One of the big, sparsely covered parts of President Trump’s plan to overhaul the government is his administration’s focus on revamping how many government agencies operate.

In 2018 the White House put out proposals to transform agencies in the areas of food, education, social services and air travel. Top on the list are to get the federal government less involved in the mortgage insurance business with the overhaul of Fannie Mae and Freddie Mac, the two mortgage securitization and guarantee companies that were nationalized by the Federal government during the 2007-2008 financial crisis. A recapitalization of the two mortgage giants would be a huge benefit to one particular high yield stock.

Fannie (founded 1938) and Freddie (in 1970) were set up as private corporations to expand the availability of home mortgages through securitization and guarantees of payment of principal and interest. The two were created by Acts of Congress and were commonly referred to as government sponsored entities (GSE’s). What you had were private companies whose businesses had an implied Federal government backing.

You may remember that the 2007-2008 financial crisis was triggered by an implosion of the mortgage-backed securities markets. As the largest issuers of this type of securities, the two GSE’s faced total collapse and went to the government for a bailout. On September 7, 2008, Federal Housing Finance Agency (FHFA) director James B. Lockhart III announced he had put Fannie Mae and Freddie Mac under the conservatorship of the FHFA. The action has been described as “one of the most sweeping government interventions in private financial markets in decades”. The two GSE’s have been “wards” of the government ever since, which is now going on 11 years.

Under complete government control, the two companies have continued to provide mortgage insurance, buy mortgages and issue new mortgage securitizations. The companies are profitable and have been paying out those profits as large dividends paid into the Federal Treasury.

Before the government takeover, Freddie and Fannie were both publicly traded corporations. Shares of the two remain in investor hands. The problem is that investors currently get no benefit from the business success of the two. The Trump plan involves getting Fannie and Freddie out from under government control and back into the public arena. Details need to be worked out between the White House and Congress.

What will happen with Fannie and Freddie unleashed with be a more competitive mortgage origination and mortgage services market place. High-yield New Residential Investment Corp. (NYSE: NRZ) is one company that has built a very well run business in the mortgage securities and mortgage servicing world. The potential synergies of doing synergetic business with the two GSE’s should be extremely beneficial to New Residential.

NRZ’s primary business is owning and managing an investment portfolio of mortgage servicing rights (MSRs). These are the payments taken from every mortgage payment to pay the servicing company. When purchased at the right price, this is a very profitable business. The company has consistently generated mid-teens annual returns with this very specialized financial instrument. I can see New Residential collaborating with Fannie and/or Freddie in the area of MSR management for the benefit of both parties.

In 2018 New Residential acquired a full service mortgage servicing business. The GSE’s are not engaged in servicing so, being able to offer the full range of mortgage servicing services to Fannie and Freddie would be another area of collaboration. As the world now works, NRZ is a very well run and profitable company that pays big dividends, resulting in a high-yield stock. The proposed government spin-off of Fannie and Freddie would only increase NRZ’s growth potential. The shares currently yield 12.1%.Mueller Report a Dud: Trump unleashes the greatest income stream in American history

While Congress and the media were too busy looking for Russians, 16 of Trump’s Executive Orders could’ve just launched a little-known income opportunity called ‘venture royalties.’ 

They’re approved by Congress and Americans are collecting checks every month for $2,123… even $9,586. Everyone is asking me about income right now, I’m pointing to venture royalties. Here’s how to collect 14 royalty checks this year. Click here.