5 Best Short-Term Stocks to Buy in October 2021

US stock markets rebounded last week amid strong bank earnings. The earnings season would drive the markets over the next couple of weeks. Here are the five best short-term stocks that look good buys in October.

While many including Warren Buffett advocate long-term investing, some traders have a flair for short-term stock. Both strategies can deliver good returns provided it is backed by a sound investment rationale.

1. Freeport-McMoRan (NYSE: FCX)

Freeport-McMoRan would release its third-quarter earnings next week. The stock looked strong last week amid the rebound in copper prices, which topped $10,000 per metric ton. As the largest copper producer in the US, Freeport-McMoRan stands to benefit from higher copper prices.

The stock still trades 16% below its 52-week highs. While it has recovered from the 2021 lows, it has room to run higher in the short term. The strong earnings season would help lift mood and boost commodity prices. Copper, which is also known as “Dr. Copper” for its ability to predict economic cycles, would be among the biggest beneficiaries of the uptrend in the global economy.

FCX is a good short-term stock amid the rise in copper prices

FCX is a good short-term stock to play the uptrend in copper prices. The stock is looking bullish on the charts too and has crossed above key moving averages including the 50-day and 200-day SMA (simple moving average). The 12,26 MACD (moving average convergence divergence) also gives a buy signal. However, the RSI (relative strength index) has risen to 67.2 and is getting bear overbought levels.

All said, given the current momentum in markets, cyclical names like FCX look good short-term stocks for October.

67% of all retail investor accounts lose money when trading CFDs with this provider

2. Steel Dynamics (NYSE: STLD)

Steel Dynamics reports its earnings this week. The stock looks like a good short-term stock to buy. While steel names have come off their highs, and STLD is down almost 17% from the 52-week highs, the upcoming earnings should help lift sentiments. Notably, while some brokerages have been turning bearish on the steel sector, others expect higher steel prices to continue.

What makes STLD a good short-term stock?

Apart from the upcoming earnings release where the management is expected to provide upbeat commentary, the infrastructure bill would also help STLD stock in the short term. Higher infrastructure investments in the US would trickle down into higher steel demand. This would help support pricing and by its extension companies like STLD. Overall, STLD looks like a good short-term stock to buy in October.

67% of all retail investor accounts lose money when trading CFDs with this provider

3. Disney (NYSE: DIS)

Disney does not report this month but still looks like a good long-term stock to buy. The stock had tumbled after the management said that subscriber growth in the current quarter would be tepid. However, the stock is looking attractive after having fallen from the peaks.

Bank of America is among the brokerages that believe that the fall in DIS stock looks overdone and the subscriber growth should pick up in the coming quarters. “DIS remains well positioned for the recovery driven by a robust advertising market, the continued increase in capacity at theme parks and a robust content slate over the next 12-18 months,” it said in its note.

DIS is a good short-term stock to play the reopening

DIS is a good short-term stock to play the reopening story. As the holiday and travel season begins, companies like Disney should see a rebound in demand. Disney is also aggressively betting on streaming and is looking to grab more subscribers in Asia. The company was rumored to spin off ESPN but the company has denied the rumors.

Overall, if you are looking to play the reopening story, DIS looks like a good short-term stock to buy. The stock also offers strong long-term growth potential amid the continued rise in its streaming subscribers.

67% of all retail investor accounts lose money when trading CFDs with this provider

4. Lordstown Motors (NYSE: RIDE)

Lordstown Motors trades near $5 which is half of the SPAC (special purpose acquisition company) IPO price. Also, the current price levels are a sixth of the 52-week highs. To be sure, RIDE is a troubled EV (electric vehicle) startup company. It was accused of inflating the order book and subsequently, its CEO and CFO resigned.

While Lordstown admitted that some of the orders were inflated, it distanced the resignation of the CEO from its investigation into the short sell report by Hindenburg Research. Meanwhile, after hiring a new CEO, the company has now hired former JPMorgan investment banker Adam B. Kroll as the CFO.

RIDE is a good short-term stock but looks risky

The worst seems over for RIDE stock. The company has a new management team and has also arranged liquidity to fund its operations. It has also partnered with Foxconn for contract manufacturing and sold the Lordstown facility to the Taiwanese company for $230 million. During its upcoming earnings release, it would provide updates on the new production and delivery timelines for its Endurance pick-up model.

To be sure, RIDE is still a risky and speculative bet. However, with a market cap of less than $1 billion, it looks worth the risk. The stock could go up in the short term if the management is able to reassure markets about its execution plans.

If you are looking at a short-term stock that can deliver high returns, RIDE would fit the bill. However, just like prospects of high returns, the risk is also quite high in RIDE stock. But then, in markets risk and return generally go hand in hand.

67% of all retail investor accounts lose money when trading CFDs with this provider

5. Facebook (NYSE: FB)

The market opinion about Facebook stock is quite bearish amid the whistleblower saga. However, having fallen from the peaks, FB stock looks like a contrarian short-term stock to buy. The street opinion has also been quite divided over FB stock. Yesterday only, Evercore ISI added FB stock to its “tactical underperform list.” The brokerage is apprehensive of the online advertising stocks.

FB is a contrarian short-term stock to buy

Earlier this month, DZ Bank had also downgraded FB stock from a buy to hold and assigned a target price of $350. However, taking a contrarian view, earlier this week, Tigress Financial raised the stock’s target price from $430 to $466.

That said, FB has been a company that has faced multiple controversies. However, its lead and moat in the social media industry are undeniable. The stock is a contrarian bet in the short term and could recoup some of its recent losses unless the current scandal blows up too much.

Buy FB Stock at eToro from just $50 Now!