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3 Diversified SPAC Stocks to Buy That Don’t Involve Electric Vehicles

Chris Tyler
·4 min read

In 2020, special purpose acquisition companies (SPACs) went from obscurity to notoriety for more than a handful of good reasons. But what does 2021 promise for today’s investors? Three diversified and well-discounted SPAC stocks point at well-positioned buying opportunities. Let’s take a closer look at what’s happening to each these promising companies, then consider risk-adjusted solutions to improve investors’ chances for success.

A year ago this alternative “direct listing” route for stocks to go public was virtually unknown. But now names like Nikola (NASDAQ:NKLA), Fisker (NYSE:FSR) and Workhorse (NASDAQ:WKHS) have become household names in the investing sphere.

You might notice a trend with the names listed above. They’re electric vehicle (EV) stocks. This theme took the pole position within the SPAC market in 2020. A greener incoming U.S. administration, market heavyweight Tesla (NASDAQ:TSLA) and it’s halo effect, as well as rapidly improving technologies allowed those companies the ability to go public under optimal market conditions. Who doesn’t want the next Tesla, right?

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But the EV theme isn’t the only one to consider when searching for SPAC stocks to buy.

Here are three others to keep in mind as the New Year begins:

  • Spotify (NYSE:SPOT)

  • DraftKings (NASDAQ:DKNG)

  • Opendoor (NASDAQ:OPEN)

As we finish the first trading week of the new calendar year, the trend into SPAC stocks isn’t going anywhere. And I’m certain there’s more EV companies still waiting in the wings. Right now though, these other plays within this arena offer diversification that also appears quite timely for buying decisions in today’s market.

SPAC Stocks to Buy: Spotify (SPOT)

Spotify (SPOT) flat base breakout weekly chart
Spotify (SPOT) flat base breakout weekly chart


Source: Charts by TradingView

The first name on my list of SPAC stocks to buy is Spotify. SPOT is an old-timer as far as direct listings go. It pioneered the process way back in 2018. Spotify may also be the biggest SPAC out there: Its market capitalization is around $64 billion. There’s good reason for that hefty valuation too. Spotify is the world’s most popular streaming music platform. Yeah, even bigger than Apple (NASDAQ:AAPL) and its Apple Music service.

Technically, shares of this SPAC stock have broken out this week of a flat but slightly wide base of five weeks. With the pattern finding successful support on top of a first-stage corrective pattern, there’s a couple strong reasons for seeing higher prices for SPOT shares in the coming weeks.

Favored Strategy: Feb 26 $360/$390 Bull Call Spread.

DraftKings (DKNG)

DraftKings (DKNG) well-supported higher-low weekly chart pattern for buying
DraftKings (DKNG) well-supported higher-low weekly chart pattern for buying


Source: Charts by TradingView

DraftKings is a heavyweight within the growing online sports betting market. With states legalizing collegiate and professional sports betting, the ease of virtual transactions and a wildly popular brand within fantasy sports leagues, what could possibly go wrong?

A lot of course.

For starters, there is competition from the likes of MGM Resorts (NYSE:MGM) and Penn Gaming (NASDAQ:PENN) to name a couple publicly traded challengers. And at times, the price chart will undeniably be a serious threat. Some investors learned that the hard way this past fall. Still, today’s odds favor bullish investors.

Technically, this week’s trading has established a higher-low pattern. The weekly candlestick has found support off DKNG’s larger corrective base from last summer, as well as uptrend support formed off a corrective move from all-time-highs which finished in early November. With a neutral positioned stochastics crossover in hand and shares matching last week’s high, it’s game time for this SPAC stock.

Favored Strategy: March $60/$70 Bull Call Spread.

Opendoor (OPEN)

Opendoor (OPEN) pullback entry within new weekly chart uptrend
Opendoor (OPEN) pullback entry within new weekly chart uptrend


Source: Charts by TradingView

Opendoor is the last of our SPAC stocks to buy. Opendoor is a disruptive online real estate company that uses proprietary algorithms to buy and sell residential properties. The technology is working as the outfit brought in $4.7 billion in sales in 2019.

With a market estimated at $1.6 trillion and backed by well-regarded venture capitalist Chamath Palihapitiya who has boasted Opendoor as his firm’s next ten-bagger investment, what more could today’s investors want? One spot to start is a nice-looking pullback entry in shares of OPEN.

OPEN shares have established a bullish engulfing pivot low this week. What’s more, the latest price action sets up a fully formed uptrend as this SPAC stock now possess a series of higher-highs and lows on the weekly time frame. As such, value looks to be at investors’ doorsteps today!

Favored Strategy: March $32/$45 Bull Call Spread.

On the date of publication, Chris Tyler holds, directly or indirectly, positions in DraftKings (DKNG) and its derivatives but no other securities mentioned in this article.

Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. The information offered is based on his professional experience but strictly intended for educational purposes only. Any use of this information is 100% the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.

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