These 3 stocks were some of the biggest winners in 2020, and traders say they should continue to climb higher in 2021. Here’s why.
Stocks had a wild 2020 and some of last year’s biggest winners could continue to climb into the new year.
The S&P 500’s top performers last year included Carrier Global (NYSE: CARR), Etsy (NASDAQ: ETSY), PayPal (NASDAQ: PYPL), Nvidia (NASDAQ: NVDA), and Tesla (NASDAQ: TSLA). All five stocks delivered three-digit-plus returns with Carrier gaining a whopping 1,350% in 2020, Etsy rising 310%, PayPal adding 117%, Nvidia returning 129%, and Tesla climbing 777% for the year.
But not all of these stocks look like good buys in 2021.
“A lot of these stocks are a little on the overbought side, but one of them is not,” said Miller Tabak chief market strategist Matt Maley. “That’s Nvidia.”
Looking at Nvidia’s chart, the stock was “very overbought” in late August, but its RSI has since come back down while the stock has traders in a sideways range.
“Instead of early pulling back, it’s seen a nice sideways correction and that’s taken its RSI chart down to neutral territory down in the mid-50s. So, that’s great,” Maley continued. “Whether the market sees a little bit of a pullback next year or if it even rallies straight from here, this one, I think, is going to have the most upside as we move through 2021.”
Maley isn’t the only one who likes Nvidia in the new year. Mizuho Securities analyst Vijay Rakesh said the stock is on his list of chip stocks that look like winners for 2021.
“While the valuation is relatively high,” Rakesh wrote in a note last week, “we believe NVDA is the leader in data center acceleration, and AI which is still in its infancy in a potential $100B market.”
As for which other 2020 winners could continue to climb this year, New Street Advisors Group founder and CEO Delano Saporu says Etsy and PayPal look positive.
Saporu said the growth of “digital payment solutions” should continue to propel PayPal higher. And as for Etsy, its slate of unique and one-of-a-kind items is a positive.
“I think they’re not trying to be Amazon (NASDAQ: AMZN),” Maley said of Etsy, adding that customers are “looking for customization. They’re looking for people that want something more specific, and they found a niche in that role, and I think Etsy still continues to move higher on momentum.”