[CHARTS] — Top Stocks for Next Week

Markets are in turmoil as we head into the second week of 2022.

  • Speculative stocks with little or negative earnings have been crushed.
  • Energy and financial names are moving sharply higher.
  • Investors are worried about inflation and rising rates.

All of these concerns (and more) are shaping the way markets are trading this year. What worked in 2021 won’t necessarily make you money this year.

That’s why it’s so important to have a current list of stocks performing well in today’s market.

Whether you’re looking for aggressive plays that can trade sharply higher, vulnerable stocks at risk of falling, or shares that you can use for generating income, I’ve done my best to bring you the most important names for the week ahead.

Check out my top charts for the week ahead and let me know what you think about this feature! (Is it something you’d like to see regularly each week?)

Shoot me an email ([email protected]) and let me know how you’re doing!

Here’s to building and protecting your wealth so you can focus on the things that really matter…

The watch lists are updated for this week!

Bullish Long Stocks

Bearish Short Stocks

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Top Stocks for This Week’s Aggressive Buyers

This list includes 20 of the most aggressive stocks with potential to trade sharply higher in a short period of time.

These stocks are great candidates for speculating on a stock price surge, or for buying call contracts that will benefit when shares trade higher.

My three top stocks in this group include EXPE, PANW and TER.

Expedia Group (EXPE)

is the world’s largest online travel agency with exposure to lodging, airline tickets, rental cars, cruises and other travel-related services. As the global economy reopens following the coronavirus crisis, EXPE should be a direct beneficiary.

The company is expected to earn nearly $7 per share this year, so investors can buy shares for about 26 times expected earnings.

Despite the broad market selloff, EXPE remains very close to all-time highs. When the market eventually rebounds, EXPE is likely to break to new all-time highs

Palo Alto Networks Inc. (PANW)

is one of the most well respected cybersecurity companies in the world. The firm works with many important customers including large corporations, government entities and internet service providers.

As cyber threats become more sophisticated, companies are implementing more sophisticated hardware and processes to protect data and keep business operational. This trend will continue to lead to more business for PANW and should help drive the stock price higher in early 2022.

Volatility picked up in early January as tech stocks sold off. But PANW held support near $500 and is still very close to it’s all-time high. That’s impressive especially considering PANW’s expensive multiple.

Teradyne Inc. (TER)

is a semiconductor equipment company that helps manufacturers test computer chips, hard drives, circuit boards and other electronics systems. With the shortage of computer chips in today’s market, TER’s business has been growing quickly.

Despite an early January selloff for tech stocks, TER has held up very well. The stock has only pulled back slightly, in a display of solid outperformance. This sets TER as a strong rebound candidate once the sellers take a break.

Top Stocks for Aggressive Price Drops

This list includes 20 of the most aggressive stocks with potential to trade sharply higher in a short period of time.

These stocks are great candidates for speculating on a stock price surge, or for buying call contracts that will benefit when shares trade higher.

My three top stocks in this group are PYPL, ROKU and SPOT.

Paypal Holdings Inc. (PYPL)

operates a platform for electronic payments between individuals and for merchants. Investors were excited about this stock in 2021 as new businesses formations surged (creating new potential customers for PYPL). Also some investors bought PYPL in anticipation of the company profiting from cryptocurrency transactions.

Today, the company is worth more than $200 billion. And this, after falling from a 2021 peak above $300 per share. The stock is still expensive, trading for more than 41 times expected profits. And with competition from many other payment processing services, the stock could have much farther to fall.

Shares have been trading sideways for several weeks, helping to work off the “oversold” pattern. A break of recent support could trigger another big wave of selling.

Roku Inc. (ROKU)

is one of the top holdings in Cathie Wood’s ARKK Innovation fund. This designation helped ROKU rise to an inflated price as investors added ARKK positions to their own account in late 2020 and early 2021. But as speculative tech stocks have fallen out of favor, ROKU has established a heavily bearish trend.

Wall Street analysts expect the company to earn $1.52 in 2022, and then to nearly double profits to $2.94 in 2023. But even compared to optimistic 2023 estimates, ROKU still trades at more than 60 times expected earnings.

The stock began the year by breaking to a new post-pandemic low. Bearish momentum is in charge for now.

Spotify Inc. (SPOT)

, the streaming music service is popular with consumers, but is losing it’s luster with investors. The stock is incredibly expensive, trading at 745 times this year’s expected earnings, and 142 times expected profits for 2023.

To be sure, the company is growing. But it still faces tough competition from Apple Music, Alphabet’s Google Music and other mediums as well. As speculative and expensive stocks fall out of favor, SPOT could have a long way to drop before the stock price matches the company’s actual business prospects.

Top Stocks for Put-Selling Income

This list includes 20 stocks that can help you generate income using my favorite stock-market income strategy.

By selling put contracts, you can receive cash in exchange for your promise to buy shares at a specific price. Stocks on this list are worth considering for this income approach.

Below are three of my top stocks for put-selling income this week: CLF, STLD and TRIP.

Cleveland-Cliffs Inc. (CLF)

is a U.S. steel producer that should benefit from growth in manufacturing. As the global economy reopens following the covid crisis, steel companies like CLF should profit from strong demand.

In addition to steel, CLF also mines iron ore pellets which are used in the steel manufacturing process. As one of the largest iron ore miners in the U.S., CLF can also profit from selling this natural resource to other steel companies located near the Great Lakes in the northern United States.

The company is set to announce earnings on February 25. Selling puts that expire after this date can add more income as the stock may have more volatility around the earnings date.

Steel Dynamics (STLD)

is a steel manufacturer with the capacity to produce up to 13 million tons of steel each year. The company focuses on products that can be sold to construction, automotive, manufacturing and transportation end markets.

Car manufacturing is ramping up following shutdowns during the coronavirus crisis. And infrastructure spending should help the company’s construction and transportation business. This is a good season for steel companies and STLD should hold current levels with plenty of potential to trade higher in 2022.

STLD is expected to report earnings on January 25th.

TripAdvisor Inc. (TRIP)

is a top travel search company. Revenues are generated primarily through advertising on it’s site along with commissions from when users book tickets or hotel rooms.

TRIP is a play on the overall economic reopening and a rebound in personal and business travel. The stock found support a bit below $25 in December — a level that may prove to be the pandemic low.

Shares are currently trading for about 22 times this year’s expected earnings. Profit growth is expected to surge 52% in 2023, so the stock’s value is relatively attractive.

TRIP is set to report earnings on February 18.

Remember, you can see all 60+ names on my watch lists by subscribing to the 20/20 Watch List. At just $15 per quarter, I challenge you to find a better value for your investment dollars!

Here’s to growing and protecting your investment wealth!

Zach