Is It Time to Buy These 3 Stocks?

It may be time to buy Twitter, Inc. TWTR, Selecta Biosciences, Inc. SELB, and FARO Technologies, Inc. FARO and the reasons why will be outlined below.

Twitter is oversold and at support. The bottom part of the below chart is the Relative Strength Momentum Index. As you can see, the last time the stock was as oversold as it is now was in January. This was a buy signal then and it may be now too.

Support is a large concentration of buyers who are trying to pay the same price. There has been support for Selecta Biosciences at the $2.95 level. Stocks frequently rally off of support levels. This happened with SELB in December and there's a good chance it happens again.

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Faro is extremely oversold. The red line on the below chart marks two standard deviations below the 20-day average price. As you can see, Faro is now trading below it.

Probability theory states that 95% of all trading should be within two standard deviations of the average. Traders will expect a reversion back to the average and will be buying, which means a rebound.

 

Posted In: Long IdeasPenny StocksTechnicalsSmall CapTrading Ideas