Thanks to the recent downside, I’ve been talking a lot about what stocks to trade when the market pulls back.
I explained Tuesday the 90/10 strategy I use to find mechanical pullbacks without having to dig deep into reading charts, which is hard for traders who don’t have a trained eye for technical analysis like I do.
It looks for stocks making three-month highs, and then waits for a 10-day pullback against the main trend to occur. Then, we enter if the stock turns back around to the upside again.
Now, I want to give away a few low-risk stocks to trade when the market pulls back that we can use to take advantage of the current sell-off in the broader market… which is the worst we’ve seen since October 2021!
2 Stocks to Trade When the Market Pulls Back
I’m becoming more and more focused on small-cap stocks lately…
They don’t have as much correlation to interest rate fluctuations and have not trended in a long time, which means they could be setting up for a good, strong rally.
So it’s probably no surprise that Rambus Inc. (Nasdaq: RMBS) is one of the first stocks to trade when the market pulls back.
Rambus is dedicated to making data faster and safer by developing chip interface technologies and architecture that are used in digital electronics products.
RMBS’s one-year return is about 41%, and it’s had four quarters of positive earnings estimates.
I have a price target on the stock of about $32 per share over the next three months. That’s especially true if tech stocks decide to make a comeback, which I believe is likely because most of the downside with rising rates is already priced into the market.
Check out my short video below to get the next stock to trade when the market pulls back.
Don’t forget to like and subscribe to our YouTube channel if you haven’t already so you can be notified as soon as we post our next video and see what other trade opportunities we’re paying close attention to!
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