2 Tech Stocks to Buy On the Dip

Tech stocks have been under major pressure recently, after jet-setting to record highs over the past few months. In fact, the Nasdaq-100 Index (NDX) just sent up a signal not seen in three years, and so-called "FAANG" stocks are in the red in spite of upbeat analyst attention. However, if recent history is any indicator, two tech stocks could be flashing "buy" right now: semiconductor names Lam Research Corporation (NASDAQ:LRCX) and Texas Instruments Incorporated (NASDAQ:TXN). Below, we'll take a look at LRCX and TXN shares, and explain why the recent pullback could be a buying opportunity.

LRCX Stock Could Bounce 

Lam Research stock is down 2.7% at $148.64, due to broad sector headwinds. The shares of LRCX are within one standard deviation of their 40-day moving average, after spending a significant time north of this trendline -- a development that's preceded bullish price action in the past. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, a month after the last 13 signals of this kind, LRCX stock was in the black 69% of the time, with an average return of 4.15%.

Prior to the tech sell-off, Lam Research stock was flirting with record highs, peaking at $167.05 last Friday. Nevertheless, short interest represents nearly a week's worth of pent-up buying demand, at LRCX's average pace of trading. Should the stock once again take off after a test of its 40-day, a short squeeze could add fuel to the fire.

TXN Stock Testing 80-Day Moving Average

Texas Instruments stock also touched a new high last Friday, peaking at a 16-year high of $84.65. Since then, TXN shares have retreated along with the broader tech sector, last seen in the $80 vicinity, but history indicates the stock could be ready to bounce. Specifically, TXN stock is within one standard deviation of its 80-day moving average, after a lengthy period above this trendline. Per data from White, after the last eight of these signals, Texas Instruments stock was in the black 71% of the time, with an average return of 4.44%.

Recent options buyers have been upping the bearish ante on TXN. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the stock's 50-day put/call volume ratio of 2.89 is in the 76th percentile of its annual range, meaning Texas Instruments options traders have picked up puts over calls at a faster-than-usual clip during the past 10 weeks.

Likewise, analysts have yet to buy into TXN's long-term rally. In fact, 12 of 20 brokerage firms maintain tepid "hold" ratings. Should Texas Instruments once again bounce from its 80-day, a round of upgrades or an unwinding of pessimism in the options pits could propel the shares even higher.