'Go Off The Beaten Track,' Market Guru Says: Buy Growth Names

Tech stocks are poised for a strong year, with growth names looking particularly attractive, according to Marc Chaikin, founder and CEO of Chaikin Analytics.

What Happened: Joining Benzinga’s PreMarket Prep on Thursday with hosts Dennis Dick, Joel Elconin and Mitch Hoch, Chaikin highlighted several companies with bullish power gauge ratings, including the following.

  • Airbnb Inc ABNB
  • DocuSign Inc DOCU
  • Pinterest Inc PINS
  • Roku Inc ROKU

Chaikin said those former high flyers have formed saucer bottoms over the last nine to 12 months and are now leading the market, with fundamentals starting to kick in and valuations much lower than before.

"You don't have to pay up like you do in my favorite stock for the year, [Advanced Micro Devices, Inc AMD]AMD," Chaikin noted.

While the tech sector has been performing well, the analyst warned of potential bank failures that could negatively impact smaller companies, such as those listed on the iShares Russell 2000 ETF IWM.

However, even in that environment, he believed tech will outperform. "If we don't get more bank failures, this tech still outperforms," he said.

Discussing the market pattern, Chaikin noted the market hasn't broken the December low, a chart pattern that has occurred only 27 times since 1950.

In 25 of those instances, the market has gone on to post an average gain of 18% for the year. He added that he's been talking about this environment where tech just wins, as evidenced by Nvidia Corporation NVDA and AMD, which have rallied strongly since their recent dips.

Chaikin advised investors to go off the beaten track and focus on the growth names. "You could really just sit with them," he said.

He suggested buying long-dated call options on some of these names, such as January 2024 expiries, one strike price out of the money, as it's a low-risk bet with time premium not likely to decay quickly.

Chaikin mentioned that while there are always pockets of opportunity in the market, growth names are particularly attractive right now. As long as the market doesn't break the December low, he expects these names to continue leading the way.

See video below:

Market News and Data brought to you by Benzinga APIs
Posted In: Analyst ColorLarge CapMid CapNewsTopicsTop StoriesMarketsTechMediaTrading IdeasGeneralBenzinga PreMarket PrepMarc Chaikin
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!