Like Friday, trade-war worries again rattled investors’ confidence on Monday, although they did well to buy the morning weakness. Let’s look at our top stock trades going into Tuesday.
Top Stock Trades for Tomorrow #1: Box (BOX)
Box Inc (NYSE:BOX) had been volatile in the first few months of 2018, rallying to long-term resistance near $24 and falling to $17.50 just days later after reporting earnings. However, it soon fought off the losses, burst through that long-term resistance and ran to $28.
Perhaps shares are simply advancing after consolidation or maybe it’s the 30% rally over the last three trading days for Dropbox Inc (NASDAQ:DBX) that are helping to drive BOX stock higher. But either way, Monday’s 7.5% gain is gripping investors’ attention once again.
If you didn’t buy the breakout over $27, up near $28 probably looks unattractive to new investors. If they’d rather though, they could buy a potential breakout over $28.50. Should BOX get above this level, it puts $30 in scope. It’s good to see the MACD shaping up bullishly (blue circle), as it shows that momentum is on the cusp of shifting back to the bulls. Those buying in now may want to use a stop-loss near $27 if they’re playing for the short-term.
Top Stock Trades for Tomorrow #2: Micron (MU)
JPMorgan analysts gave Micron Technology, Inc. (NASDAQ:MU) bulls something to cheer on Monday: a nod ahead of earnings. They maintain their overweight rating and $82 price target, arguing that ballooning cloud budgets bode well for Micron. Despite the comments though, Micron stock was flat on Monday.
The company reports earnings on Wednesday, which will undoubtedly take it off some traders’ radar.
Shares pulled back into level support near $56 on Monday, giving some investors a chance to gobble up MU stock for a quick rebound. We’ve liked this level in the past, using it in early June to play for a quick $6 rebound up to $62. If support holds here, new all-time highs may not be far off. Be sure to use discipline with MU stock though, as it tends to go on extended runs in both directions.
Also worth noting is Micron’s recent earnings reaction, with shares tending to pop on the earnings release and then sell off.
Top Stock Trades for Tomorrow #3: Intel (INTC)
Unlike the positive analyst nod that Micron got, Intel Corporation (NASDAQ:INTC) caught a downgrade from Northland Capital. The analysts assigned an underperform rating and $45 price target on INTC.
Could we be so lucky to buy at $45?
Probably not. Monday’s 3.6% fall thrust INTC below the 50-day moving average and below recent channel support. Up next is the 100-day moving average, which was support back in February.
Should it get there, the 100-day should provide a short-term bounce to INTC at the very least. At the most, it’s a buying opportunity for long-term investors as it propels Intel to new highs just as it did a few months ago.
If it doesn’t hold up though, it could send INTC back down to that $47 to $48 area. In that area, level support should come into play, as should the 200-day moving average. I would surely be a buyer in this area, given the secular demand behind INTC’s business.
Top Stock Trades for Tomorrow #4: AT&T (T)
Both came into play, as T bounced from $31, ran to $34 and fell after the deal was approved. So now what? I again believe the $31 level will play a role in T’s fate.
Should it hold, investors have an attractive risk/reward. As we said before, AT&T’s dividend yield has been solid support when it gets over 6%. That leads me to believe that, unless the market doubts AT&T’s ability to pay its dividend, that it should again limit the telecom giant’s downside.
T is a low-risk buy near $31, which offers a great risk/reward for investors.
Top Stock Trades for Tomorrow #5: ZTO Express (ZTO)
The Chinese stocks — Sogou Inc ((NYSE:SOGO), Huya Inc – ADR (NYSE:HUYA) and iQiyi, Inc (NASDAQ:IQ) — have all been on fire. They’ve also garnered all of the attention, especially as ZTO Express (Cayman) Inc (ADR) (NYSE:ZTO) has quietly rallied over the past few weeks.
The stock has, quite literally, spent the entire month of June consolidating between $20.25 and $21.50. That a great move to work off its overbought status — and gives us a solid trading opportunity.
I want to buy a breakout over the $21.50 level in ZTO. Should it do so, it could fuel a run of more highs. If it falls out of the consolidation zone, I would expect a drop to at least $19.50 and possibly even down to $17.50.