The markets aren’t reacting much to the White House’s successful dealing with North Korea. Perhaps it’s because of the upcoming Federal Reserve meeting on Wednesday. Despite that, there are a lot of good setups making our list of top stock trades.
Top Stock Trades for Tomorrow No. 1: United Parcel Services (UPS)
Earlier this month, we flagged the increasing odds of a breakout in FedEx Corporation (NYSE:FDX). Well, now United Parcel Service, Inc. (NYSE:UPS) is playing along too.
This one is clean and simple and those are the setups we like best.
Over $118 and UPS stock is technically in breakout territory. Should that level give way and ultimately turn into support, look for UPS to run to $124. If it can build momentum, like FDX, its prior highs will be on target.
Trend-line support has been climbing sharply, I admit, but it has held so far. A break below and bullish traders can hit the exits.
Top Stock Trades for Tomorrow No. 2: U.S. Steel (X)
A lot of stocks are acting well and like UPS, United States Steel Corporation (NYSE:X) is one of them.
The market is clearly in a rhythm, because we have so many stocks within different sectors all flashing similar setups. I like that. X stock has the same pattern as UPS: higher lows and it’s butting its head up against resistance.
Maybe resistance holds and pushes X stock back down to support. But with support sitting just about a buck-a-share lower than resistance, one of these two levels is going to give way soon.
Because of the trend, bulls are hoping the one that gives in is $38 resistance. Should it do so, look for a rally into the low-$40s. If $38 holds and trend-line support fails, X stock is likely heading down to the mid-$30s.
Top Stock Trades for Tomorrow No. 3: Nucor (NUE)
UPS and FDX trade in somewhat a harmony, why not X and Nucor Corporation (NYSE:NUE)?
You’ll notice in my disclosure below that I’m long X (for the solid risk/reward breakout trade) and not NUE. Over $66 was a big move for NUE and like X, it sits just below resistance.
However, it doesn’t have as strong of support nearby, which was my only real reason for going with X over NUE. I could measure my risk more clearly and I find that more important than the potential reward.
Should steel stocks advance, NUE is unlikely to be left behind. Should NUE breakout too, look for a close north of downtrend resistance, near $67.50.
Top Stock Trades for Tomorrow No. 4: FMC Corp (FMC)
I don’t think we’ve ever talked about FMC Corp (NYSE:FMC) in the “top stock trades” piece. It’s a company with a unique business, benefiting from a forced asset sale in the DowDuPont Inc (NYSE:DWDP) merger and an in-demand lithium business.
In any regard, we’re not here to discuss its fundamentals. Luckily though, its chart is giving us something to work with.
There’s clearly support in this $85 to $88 area for FMC stock. Along with a slightly rising 200-day moving average, bulls have some cushion just below current prices. Should short-term traders take a long position, they could do with a solid risk/reward near current levels.
Should support hold, my first target would be $94.
Top Stock Trades for Tomorrow No. 5: Twitter (TWTR)
We were buyers of Twitter Inc (NYSE:TWTR) in the teens, low-$20s and most recently on that pullback to $27. The calls can be found all over InvestorPlace. But we didn’t stay aggressive enough with TWTR.
In early June, we did say investors could buy a breakout over $37, but we were certainly starting to look for the exit, rather than the entrance. That was as TWTR stock was running toward what seemed to be previous resistance near $37 and it was becoming overbought. Shares broke through with ease the next day and again through $42 resistance shortly after.
Some of the most respected Twitter traders (no pun intended) that I follow have marked the name for more upside. Some — and including JPMorgan analysts now — are looking for a run to $50 or higher.
Maybe TWTR will do just that, but not before a pullback in my eyes. Since Twitter is sporting an RSI of 86 and a big-time rally of more than 40% over the past six weeks, look for it to cool off. If $42 fails as support, look for its prior highs near $37 to hold up.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, he held positions in X, FDX and UPS.