Hedge fund manager Jim Roppel joined the Investing with IBD podcast this week to discuss his bullish outlook on the current market and lessons he’s learned from recent trading mistakes. Plus, we take a look at top growth stocks on Roppel’s 2021 watchlist, including PayPal (PYPL), Etsy (ETSY) and Qualcomm (QCOM). PayPal stock and Etsy stock are making big moves after clearing buy points in recent weeks.
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Stocks Rise On Stimulus Taks; PayPal Stock And Etsy Stock Gain
The Nasdaq composite and S&P 500 hit more record highs in the stock market today as stimulus talks lifted the major indexes.
The Nasdaq gained 0.6% Thursday, crossing the 12,700 threshold for the first time. Positive price action capped a fourth-straight day of gains for the index, on pace to gain 3% for the week.
Similar action was seen in the S&P 500, with that index climbing 0.5% to clear the 3,700 mark. The Dow Jones Industrial Average also gained 0.5% on Thursday.
“I’m super bullish on the opportunities I see in front of us,” Roppel said of the current market action. He added that pent-up demand from coronavirus shutdowns could lead stocks into higher territory. “I think the spending that’s going to be unleashed by the consumer is going to be impressive.”
Two stocks benefiting from this spending are PayPal stock and Etsy stock. PayPal stock has seen triple-digit growth since March, jumping more than 10% so far this week. Etsy stock also is on pace for a 10% gain this week through Thursday’s close.
Evolution Of A Trader
Roppel also delved into his trading evolution. He discussed how he learned to build position sizes and cushions in stocks. Additionally, he reviewed some recent trading mistakes for investors and what the lessons he learned.
But his biggest piece of advice for investors is to surround themselves with good mentors.
“Having people there is your guardrail,” Roppel said. “Popping that ego is critical to success for everybody.”
Catch the full episode to hear Roppel’s investing lesson.
Roppel’s Stocks To Watch In 2021
Roppel also discussed top growth stocks on his watchlist for 2021. These ideas include PayPal stock, Etsy stock and Qualcomm stock.
While these are stocks on Roppel’s watchlist for the year, not all the names he presented are currently actionable. Investors should always make sure a stock has strong fundamentals and is clearing a proper entry before buying.
Listen to the full podcast to hear the complete list of Roppel’s top stocks to watch in 2021.
PayPal stock tops Roppel’s list for growth names to watch in 2021. The digital payments platform has seen explosive growth since the depths of the coronavirus stock market crash. Since falling to a March low of 82.07, PayPal stock has rebounded 188% in price.
In more recent action, PayPal stock is having a big week. Shares are up 8.5% since clearing a 215.93 buy point in late November. Aggressive investors may have opted to initiate a position when the stock cleared a downward-sloping trend line that coincided with the stock retaking its 50-day line.
“You have super durable, stable earnings and a 99 Composite Rating,” Roppel said of PayPal stock’s fundamentals. “Don’t ever say stock can’t go higher. Because it totally can and PayPal could become one of the biggest financial companies in the world.”
Etsy stock is another growth name on Roppel’s watchlist. Much like PayPal stock, the e-commerce retailer has seen triple-digit growth since hitting a March low of 29.95.
Shares cleared a 154.98 buy point in heavy volume on Nov. 27. Etsy stock has jumped 21% since that breakout, triggering the 8-week hold rule. O’Neil’s rule states to hold a stock if it gains more than 20% from a buy point within 3 weeks of clearing a proper base.
“The fundamentals here are just so strong. (Etsy stock) is so with the times,” Roppel said.
Etsy stock currently boasts an EPS Rating and Composite Rating of 99 — the highest possible score. It also holds a strong Relative Strength score of 97. Growth stocks with Composite Ratings and Relative Strength lines above 95 are indicators of a leading growth stock primed to make big moves.
One final idea for investors’ 2021 watchlists — Qualcomm stock. The 5G chipmaker stands to benefit from emerging 5G technology deployment. Qualcomm stock broke out of a wide cup-with-handle base in July.
The recent action for QCOM stock also looks impressive when analyzing a monthly chart.
“This just emerged out of a monster base,” Roppel said of Qualcomm’s price action. He added that QCOM’s growth has been fomenting for some time. “Any stock that comes out of a 21-year base, it just completely got my attention.”
Qualcomm stock has consistently found support near its 21-day exponential average since clearing its buy point. But shares recently fell below that critical level in the last week, but are now back above it. Investors should watch to see if QCOM can bounce off that support level as a sign of continued strength.
Interested In PayPal Stock?
If you’re looking for the next top stocks primed to make big moves, check out IBD’s Stock Lists page. To get IBD’s real-time assessment of leading names in tech stocks like PayPal, check out IBD’s Stock Checkup page.
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