S&P 500's most volatile stocks could be worth a look – traders pick two favorites

Time to double down on some of the most volatile stocks, traders say

Markets have seen wild swings in recent days as investors digest the latest news between the U.S. and Iran.

But, is there opportunity to double down on volatility with the stocks most prone to outsized moves?

AMD, Ulta Beauty, American Airlines, Marathon Petroleum and Mosaic are the stocks on Wall Street with the highest beta, a measure that indicates how much a stock moves relative to the broader market.

"High beta is very interesting because you're always going to see some moving and shaking. But we have to be careful because it's these who live by the sword, die by the sword, and a recent victim of a high-beta sell-off is Ulta Beauty," JC O'Hara, chief market technician at MKM Partners, told CNBC's "Trading Nation" on Wednesday.

Ulta Beauty, which has fallen 25% in six months, could be a highly volatile stock worth a second look, according to O'Hara.

"We actually like the short-term prospects here. It's slowly starting to stabilize, starting to establish a base," he said. "What really gets us excited is … the longer-term uptrend remains intact. If this stock repeats its pattern from 2016 to 2017 and from 2018 to 2019, those are two tests of that longer-term uptrend line and the rally off that line was in excess of 100% the first time, and then in 2018, we rallied 85%."

"So we're thinking if we rally again, similar to those past instances, we can at least at the minimum look to the 2019 highs at $365 so that's a decent upside from here," said O'Hara.

Danielle Shay, director of options at Simpler Trading, said it pays to be cautious with broad markets at highs after a strong run, but does see one solid high-beta candidate.

"We've seen just this massive rally and it's difficult to buy any of them at the highs so of course buying them on a pullback makes sense, but I do love them, particularly AMD. This is very hot. The semiconductor space is hot. It's going to continue expanding and growing," Shay said during the same segment.

AMD has led the semiconductor space and broader markets in the past year. The stock has risen 147% in the past 12 months, while the SMH semiconductor ETF is up 61%.

CEO "Lisa Su at the head is amazing. You have a superior product, superior manufacturing product at AMD, and I think this one is going to continue to grow over time," Shay said.