We are ending the week on a down note. All major indices are lower on the day, while small caps are getting crushed. Companies are missing on quarterly estimates, tariffs are becoming a big concern and despite a 4.1% GDP for the second quarter, stocks are struggling to move higher. Let’s look at our top stock trades for Monday:
Top Stock Trades for Monday #1: Twitter (TWTR)
Many people thought Facebook’s (NASDAQ:FB) issues wouldn’t impact Twitter (NYSE:TWTR) and while to some extent they didn’t, both social media companies are struggling.
A day after FB plunged 20%, Twitter followed with its own 19% post-earnings blundering. Now what?
I was watching the $37 as a potential buy zone, given that this was a previous breakout level. Further, the 100-day moving average had been support in the past and there was some trend-line of support near that level too.
But it clearly failed as support, with shares knifing right through that level. $34 could offer some reprieve, but it may be best to give the market another day or two to sort out Twitter. Below $34 and the 200-day moving average is a possibility.
Top Stock Trades for Monday #2: Intel (INTC)
It was an ugly showing for Intel (NASDAQ:INTC) as well, which fell 9% on its earnings results. Surprisingly, Nvidia (NASDAQ:NVDA) stock is taking the news pretty well, down just 1.5%.
Not long ago, I really liked Intel at $47. The downside of that though required a big decline and a move below the 200-day moving average. That’s not a healthy sign and seems counterintuitive to wanting to buy the stock.
But here we are with INTC close to $47 now, which at least gives buyers a low-risk entry. Should that level fail, they can bail with minimal losses.
Without CEO Brian Krzanich at the helm, Intel could struggle for a few quarters. If it continues to fall, $42 should be pretty decent support. Keep in mind where this stock came from last summer, which can be seen on the far left of the chart.
Top Stock Trades for Monday #3: MasterCard (MA)
You don’t need to see a trend-line to realize MasterCard (NYSE:MA) has been a monster over the past few years.
When it comes to trends, it is our friend until it bends. Meaning we buy the dips and ride it higher until it fails to work. It’s worked in names like Adobe (NASDAQ:ADBE) and MA for some time now. Eventually, it will fail, but until it does, it’s the stock market’s version of an ATM.
We don’t want to short these stocks or try to get too cute with these names. Trust me, I should know. I sold MA into that huge rally at the beginning of the year. Guess what? It’s up 27 points from there — and that includes the recent pullback.
Each test of the 50-day has been a buying opportunity over the last 18 months. With the economy doing well and business humming along, I don’t see why we wouldn’t buy another 50-day test for MasterCard.
Conservative investors can wait for a 100-day test or a 75-day test (not shown), but you should know that it may not occur.
Top Stock Trades for Monday #4: General Electric (GE)
As if looking for the opposite of MA, we have stumbled into General Electric (NYSE:GE). $14 seemed like it would be support and its turned into a cold-hearted level of resistance. Further, that downtrend line (blue) came roaring back to life.
Now the inevitable seems likely, which would have GE retesting its 52-week lows. This mark has supported the stock twice and while management is making moves to improve its long-term business, it’s not there yet.
Either way, it’s setting up GE for a big test. It either needs to push through downtrend resistance or it will break below support and make new lows.
Top Stock Trades for Monday #5: Noodles (NDLS)
Noodles (NASDAQ:NDLS) been under pressure following a secondary offering at $10 per share. Before that, the company recently hit highs over $13, an impressive feat for a name sporting 52-week lows with a $3-handle.
Shares have been in retreat as of late and regardless of the fundamental situation, it’s come up on traders’ radar screens.
The 50-day has been strong support all the way back to September, before failing in July. While perhaps that’s a sign to exit the name, we could find some support at the 100-day. Further, trend-line support is coming into the picture.
Investors who want a speculative play could consider buying NDLS near $9.50 and look for a bounce. If it returns to the highs, We can pick up $4 a share. If trendline support and the 100-day fails, we can bail with minimal losses. One other consideration? Buying on a close over the $10 offering price.
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 and ADBE.
