The Nasdaq 100 just hit a record, but that doesn’t mean buying tech is off the table, one expert says.
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The tech-heavy index made an all-time high Wednesday morning, helped by a 4% surge in shares of Intel. And, according to Blue Line Futures President Bill Baruch, there’s probably even more upside for the chipmaker.
« I think Intel had the most constructive pullback to those December lows, which was a double bottom, » Baruch said Tuesday on CNBC’s « Trading Nation, » pointing to the semiconductor company’s three-year chart.
« It’s come off those lows very well and, ultimately, it looks to be trying to close out above those highs from last year, » Baruch continued. « A close out above $58 is very, very bullish. »
As for Apple, shares of which inched higher in early trading Wednesday after the iPhone maker ended a yearslong battle on Tuesday with Qualcomm over patents, Baruch said the real test will be if the stock can push above the key $200 level. Apple’s opening price on Wednesday was $199.54.
« The 50-day moving average has not crossed out above the 200 in Apple yet. There is some strong resistance at $200. It’s a big battle ground there. But the [average directional index], which shows whether a stock is trending or not, is picking up force, » he said. « I think that, ultimately, Apple has the potential to really work hand in hand with the Nasdaq in a breakout. And don’t doubt it that Apple would be the fuel that really could drive a second-half move in the Nasdaq upon a breakout and really outpace other stocks. »
Michael Binger, president of Gradient Investments, favored another big-cap tech name: Google parent Alphabet.
Noting that he would rather wait for a pullback before buying most tech stocks, Binger said investors who need to buy at these levels should consider Alphabet for its internet advertising business and « the long runway of growth » it has.
« It’s not the cheapest stock in the world, but the growth warrants that multiple, » he said in the same « Trading Nation » interview.
Binger’s other picks? Fintech leader PayPal and under-the-radar biotech play BioMarin.
« I think PayPal is a great name and one of the leading companies in that space to own. It’s had an aggressive move, so any move below $100, I would step in full force, » he said.
Binger said BioMarin was on his list because it « is a biotech company that actually has revenue. »
« These revenues are growing 15% on a year-over-year basis, » he said. « They tend to spend a lot of money, but they’re doing so because they have what we consider a very interesting pipeline of new drugs that are coming on the market. So, all in all, I would look at Google, I would look at BioMarin and I would look at PayPal on a pullback in this kind of overbought space right now. »