Stocks took a beating on Monday, with the Nasdaq falling over 2.5% and the Dow Jones falling almost 2% on more fears over a trade war. How does that impact our top stock trades going forward?
Top Stock Trades for Tomorrow #1: Amazon (AMZN)
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Helping fuel the decline in tech is Amazon.com, Inc. (NASDAQ:AMZN), which is down 3.5% on the day. However, support may come into play soon.
After hitting highs just last week over $1,750, AMZN is already down more than $100 per share. Should further weakness ensue this week, support could come into play near $1,600 to $1,615.
This was the previous breakout level for the stock and the 50-day moving average is also here. Below there, $1,550 should act as support. AMZN is a sentiment leader, so it’s important to watch this name going forward.
Top Stock Trades for Tomorrow #2: Nvidia (NVDA)
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Another sentiment leader? Nvidia Corporation (NASDAQ:NVDA), shares of which were pulverized Monday to the tune of down 5.6%.
It thrust NVDA below breakout support near $250 and below its trend-line of support, depending on how one draws it. In any regard, the $215 to $225 level showed plenty of support throughout the first half of 2018. With the 200-day moving average now at $221, I would expect this level to at least hold up as temporary support.
Below here though and the charts for NVDA become a bit more worrisome, regardless of the great fundamental story.
Top Stock Trades for Tomorrow #3: Walmart (WMT)
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One of the things I like to do on terribly weak trading days is to look for strength. One name that stood out is Walmart Inc (NYSE:WMT).
Now I don’t know if Walmart will continue to pay the bulls for their short-term pledging to the stock. But WMT is one that could outperform if the market remains weak.
Support is pretty clearly laid out near $82 and bulls could take a small position and use a close below that mark as their stop-loss. With WMT not finishing the day on its highs and just below its 100-day and 200-day moving averages, I’m not inclined to chase it, though.
At the very least, WMT warrants watching after Monday’s move.
Top Stock Trades for Tomorrow #4: Ventas (VTR)
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Another area showing some strength? REITs and specifically, Ventas, Inc. (NYSE:VTR).
Shares of this 5.65% yielder were higher by 50 basis points on the day. A week after the Fed announced it would again increase interest rates, REITs like VTR endured a short selloff. But VTR failed to put in a lower low, instead, notching its third straight higher low since its big rally in April.
3 times makes a trend and that’s what we’ve got with VTR.
Shares are now butting into resistance near $55 to $56, while the 200-day moving average looms just ahead. VTR and other REITs proved that higher rates shouldn’t slow them down too much anymore. Now, it’s showing resilience in the face of stock market declines.
Up and over the 200-day and bulls’ confidence should improve much more. Plus, that yield is pretty tasty over 5%.
Worth noting is that for VTR to get down to a 5% yield, shares would need to rally to $63.
Top Stock Trades for Tomorrow #5: FedEx (FDX)
FedEx Corporation (NYSE:FDX) is a great example of why we map out a plan of attack and — here’s the important part — stick to the plan.
In the beginning of the month, we highlighted why we liked FDX. Shares were knocking on the door of a breakout over $255 and were trending higher. That breakout triggered and shares were moving higher.
Then trade war worries heated up and earnings kicked in last week. FDX flirted with finding support at the breakout level, but then gushed lower and collapsed.
Had investors followed the rule of exiting on the failed breakout near $255, they would have saved themselves more than $20 per share and a lot of heartache, not unlike the trade with Boeing Co (NYSE:BA).
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell held a long position in NVDA.
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