In short, Tuesday was a Wall Street beatdown.
The PowerShares QQQ Trust, Series 1 (ETF) (NASDAQ:QQQ) was down 2.5% at its lows, while the Dow Jones Industrial Average tumbled about 2% on the day. So what are the top stock trades we’re watching?
Top Stock Trades for Tomorrow #1: 3M Stock
3M Co (NYSE:MMM) isn’t doing any favors for the Dow. The company missed earnings per share estimates by a penny, beat on revenue and provided somewhat disappointing earnings.
The quarterly report was certainly mixed, but it’s chart is not as 3M stock realizes an 8% loss for the day. Shares are now down over 20% from the highs. What now? Investors who feel compelled to buy can consider doing so between $190 and $195. However, shares are barely oversold at this point — surprising, I know. At least, that’s what the technicals tell us (blue circle on the chart).
Below all three moving averages isn’t good and clearly 3M doesn’t have bullish momentum. Bulls can look for a bounce in the area outlined above, but I wouldn’t want to touch it if this level fails.
Top Stock Trades for Tomorrow #2: NXP Stock
Just earlier this year investors were banking on a higher-than-expected takeout price. Now they might not get any deal.
Near the psychologically important $100 level and carrying a technically oversold condition, we could get a bounce in NXPI. Particularly because it has a low valuation and decent secular trends at its back. But like 3M, I’d rather be picky and wait for slightly more downside. No use in being a hero in today’s market conditions. Near the $95 to $97 level would be more attractive for bulls, if only because continued selling pressure will likely hurt NXP.
Top Stock Trades for Tomorrow #3 Tesla Stock
Tesla Inc (NASDAQ:TSLA) has had a volatile stretch over the last month and Tuesday isn’t making it any easier.
When shares were near $250, we called it a critical level just before the rebound higher. Then we said to see how TSLA handles its next critical mark: $300. It failed there.
And with its recent decline, the April lows are back on the table. With Tesla — again — keep it simple. Above $300 is good and below is bad. If it keeps falling, look for a potential bounce near $250.
Top Stock Trades for Tomorrow #4 Square Stock
Square Inc (NYSE:SQ) was hammered Tuesday, at one point falling about 10%.
The move is not good, thrusting SQ below what I consider a very important trend-line. A test of the 100-day moving average will be next if SQ doesn’t get back above this trend-line in a hurry. If it fails there, then we definitely have a problem.
Top Stock Trades for Tomorrow #5: UPDATE Amazon and Raytheon
With Amazon we said to wait for a pullback to $1,500, with additional support near $1,450. Luckily, we didn’t have to get bit the first time only to see $1,450 come along a few days later. In one swift move we’ve got AMZN back to trend-line support, giving bulls a great risk/reward on the e-commerce juggernaut. A close below and bears might be able to run AMZN down to its 100-day moving average.
Now let’s look at the RTN stock chart.
We flagged the breakout over $220, which quickly took RTN up to $230. Despite Lockheed Martin Corporation (NYSE:LMT) beating on earnings and revenue expectations and raising guidance, the stock’s down over 5%. That’s weighing on RTN too.
However, RTN is right back in that sweet spot. Although it’s just below its former breakout area, trend-line support and the 50-day moving average held up well. Bulls can use this level as an attractive risk/reward buying opportunity.