Avoid Meme Stocks as Plunge Accelerates

September’s technology plunge already hurt meme stocks. Gone are the days that momentum buying would guarantee at least a few weeks of an uptrend. Now that speculators lost money buying meme stocks at a peak, they will think twice. Among the least volatile is BlackBerry (TSX:BB).

On two occasions this year, BB stock traded at above $18 only to plunge in the following months. The company posted quarterly revenue that is better than markets expected. BlackBerry is a multi-year turnaround play. Without the meme status, the company is worth looking at for its value. Bed Bath and Beyond (NASDAQ:BBBY) plunged by 26% last week when the company posted quarterly results. BBBY stock traded in a narrow range, then buying volume dried up. Investors should avoid this specialty retail firm.

Clover Health (NASDAQ:CLOV) is another high-risk momentum stock. The healthcare plan business has little growth. Clover does not offer anything new in the market. GameStop (NYSE:GME) is steady but risks fading. The short position is still around 12%, so it is not a stock to bet on, either. ContextLogic (NASDAQ:WISH) has no fundamental strength left. It needs more funds to invest in a broken business. The e-commerce site lost user traffic as customers returned to work physically. Wish offers a poor shopping experience. The stock has more downside ahead