These Tech Stocks are a Steal at Current Levels
The tech sector's recent pullback has created buying opportunities
It's been a rough stretch for tech stocks, with the Nasdaq Composite (IXIC) starting the month of June in correction territory. This recent pullback has created some buying opportunities throughout the sector, with software stocks Keysight Technologies Inc (NYSE:KEYS) and Adobe Inc (NASDAQ:ADBE) both trading near trendlines with historically bullish implications.
KEYS Stock Buy Signal Has Never Been Wrong
After hitting a record high of $93.77 on April 24, Keysight Technologies stock pulled back drastically, falling all the way below the $72 mark by late May. This brought the stock within one standard deviation of its 10-month moving average. According to Schaeffer's Senior Quantitative Analyst Rocky White, in the three previous times KEYS has tested support at this trendline after a lengthy stretch above it, the shares were up 33%, on average, three months out, with all three of the returns positive.
Since its May 29 bottom at $71.03, KEYS stock has added 11% -- last seen up 0.7% at $78.86 -- thanks in part to a positive earnings reaction. Even more upside could shake some of the weaker bearish hands loose, too, which could keep the wind at the security's back. For starters, short interest surged 39% in the most recent reporting period to a record-high 4.65 million shares. Plus, the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.09 ranks in the 89th annual percentile, meaning short-term speculators are more put-heavy than usual.
Adobe Stock Seems Overdue for Bull Notes
Adobe stock peaked at $291.70 on April 29, before pulling back to its rising 80-day moving average. Per data from White, there have been 11 other times in the last three years the equity has come within one standard deviation of this trendline after a significant period above it, resulting in an average one-month gain of 5.6%, and 80% win rate.
