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Three stocks to buy on recent weakness: Technician

Three stocks to buy on recent weakness: Technician

As market volatility increases, Rich Ross of Evercore ISI has three stocks to buy on the dip.

The Dow, and Nasdaq opened lower for the sixth straight session on Wednesday, as the S&P tracks for its worst day in nearly three months.

"When volatility picks up in the broad market, I like to go back to a place where I know I'm loved," Ross said. And one of those places is tech giant Facebook.

A friendly face

"This is simply a stock that has not wavered. You can see this textbook trend line gives us this bullish ascending triangle, and importantly we have tested and held the breakpoint on that pullback," Ross said. An ascending triangle pattern typically depicts that a stock will continue along an uptrend.

Furthermore, Facebook stock was able to hold above its 100-day moving average, a bullish signal that the stock is ready to take another leg up, Ross explained. "Facebook is a stock that you want to buy in this uptick in volatility."

Facebook is up more than 50 percent this year and trading roughly 3 percent from its all-time high.

Living singles

Ross also pointed to Chinese e-commerce giant After an extremely successful weekend of sales from Singles Day, Ross explained that despite a head-and-shoulders top in the chart, the stock did not break below that lower neckline and instead held above its key 200-day moving average. A head-and-shoulders pattern refers to when a stock makes a high, rallies to a higher high and declines back to the lower high.

"Now what happens when a head-and-shoulders fails to break down, we tend to get a big rip in the opposite direction, and this neckline is a springboard to higher prices. That's exactly what happened with I think history repeats itself with," Ross said. is up 50 percent this year, although the stock has fallen more than 20 percent from its August high.

It's electric

Lastly, Ross pointed to Tesla as a stock to buy when volatility picks up.

Despite the stock's recent weakness, down 22 percent from its September high, Ross stressed the importance of looking at a longer-term chart in order to get a better grasp of its performance.

"The stock is up against the ropes, and we've pulled back to critical long-term support at the high end of this very well-defined multiyear base of support [around the $280 level]," he said.

He added that if Tesla's stock is able to hold above the support level at the 50-week moving average, you're going to get a sharp move in the opposite direction. "In this case, it's higher," Ross explained.

Tesla shares are up more than 40 percent this year.