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Cathie Wood’s top 10 stocks in her Ark Invest portfolio were dubbed “WoodStocks” by CNBC’s Jim Cramer. The superstar stock picker has benefited from a surge of popularity in 2020 but her portfolio has reversed course in 2021 amid rising inflation and bank yield concerns.
Many of the individual stocks in Wood’s portfolio are down double-digit percentage points since the start of 2021. Most notably, Tesla Inc (NASDAQ:TSLA) is down 19% since January while Coinbase Global Inc (NASDAQ:COIN) is down around 20% since its IPO.
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Investors looking to pick just two names out of Wood’s entire portfolio may want to consider both Tesla and Coinbase. Both present a compelling value proposition given their long-term growth prospects.
Tesla taking a breather
Shares of Tesla have pulled back nearly 35% since hitting the $900 level in early January. This pullback is likely to be temporary because Tesla has done to the auto industry what Amazon.com (NASDAQ:AMZN) did to retail: disrupted a multi-trillion dollar industry that was poised for a change.
Source: Tradingview.com
Technically, Tesla shares appear to have found strong support at around $575.00 in the 60-minute chart. They also appear to be recovering from oversold levels of the 14-hour RSI. This puts the stock in a strong position to bounce back from recent declines.
Short-term investors and swing traders can buy Tesla stock at current levels and look to close their position at around $619.00 and $650.00 in the short term. Longer-term sell recommendation points are $704.00 and $750.00.
But investors looking to best copy Wood’s investment philosophy and are buying Tesla stock for the long-term should hold until the stock hits her price target of $3,000.
Coinbase stock just getting started
Coinbase is the third-largest cryptocurrency exchange based on trading volume. It is also ranked the best platform for bitcoin traders, according to Business Insider.
The company is still an infant when it comes to public market exposure, which means the next few months could be volatile as investors are still unsure how to properly value the stock.
However, the long-term potential remains intact, especially given the promising outlook of the crypto market dominated by bitcoin, ethereum, and other altcoins.
Source: Tradingview.com
Technically, Coinbase stock appears to have recently bounced off the key support level at $252.00. It looks like it is about to perform a double-bottom reversal pattern, which would take it higher towards $300.00. The stock has also recovered from oversold levels of the 14-hour RSI. Investors can target profits at $280.00 or higher at $300.00.
Conclusion: buy Tesla and Coinbase shares
From a technical perspective, the two stocks appear to have found strong support zones, which could trigger a rebound. Therefore, technical analyses suggest that they are both compelling buys.
Looking at the fundamentals, the P/E ratio of Tesla stands at 576.65. Coinbase’s equivalent is 413.43. They are both elevated which leads many to conclude the stock is very overvalued. However, both Tesla and Coinbase offer exceptional growth stories that could last many years, if not decades.
