Banks were off to a hot start on Monday amid an otherwise unmemorable performance from U.S. equities. Let’s look at the financial sector first for our top stock trades.
Top Stock Trades for Tomorrow #1: Bank of America (BAC)
It also propelled BAC back above an important level. Some will say $28.50 is the level to watch, but in my view $29 is more significant. All through 2018, this level served as support until late June, when it finally gave way.
Now back above, bulls need to see BAC stock hold above this mark. The only thing keeping it from being a flat-out, low-risk buy is downtrend resistance. BAC is running into the trend-line right now.
One more strong day of follow through though and bulls will have plenty to be excited about. It would technically open the door up to the stock returning to its highs near $33. Bulls could still take a long position and use a close below $29 as their stop, but they risk taking the position right near resistance.
It depends on how aggressive bulls want to be at this point. It’s encouraging that the MACD shows bullish momentum (red circle) and the RSI shows BAC isn’t overbought (blue circle).
Top Stock Trades for Tomorrow #2: JPMorgan (JPM)
Similar to BAC, shares of JPMorgan Chase (NYSE:JPM) needed to climb through this $105 to $106 level to get me interested on the long side.
Not only did it do that, but it powered through after it beat on earnings estimates last Friday. It’s worth pointing out that JPM has a better dividend yield (now near 3%) and buyback than BAC.
Like Bank of America though, JPMorgan is running into resistance. If I had to choose between the two, I would rather buy BAC into resistance than BAC because the downside is lower.
However, I would consider either stock one that investors should want to be long (or both) if they breakout over resistance.
Top Stock Trades for Tomorrow #3: Amazon (AMZN)
Monday marks the start of Amazon’s (NASDAQ:AMZN) Prime Day, which will last through Tuesday.
However, shares of the e-commerce giant continue to rally into this event. It even snagged a $2,000 price target from Credit Suisse analysts Monday. I’m not saying that AMZN won’t get there over time, or even in the next few days at this rate.
But I would caution investors about buying in right now. The stock sports a 74 RSI, suggesting shares are overbought. It’s rallied right into a huge event and a decline or pause would be reasonable at this point.
I’d be more apt to take profits than take on a new long position in AMZN right now. There’s plenty of support down between $1,650 and $1,750.
His tweets have since been deleted, but it’s created quite a buzz from this weekend. It’s also thrust the stock into a very dicey territory.
This $300 to $310 level has been quite important. Now hovering in that zone now, a break below would be quite bad for the bears. Further, Tesla’s newly formed trend-line of support comes into play near $305.
So it’s quite clear that if it loses this $300-ish level, bulls could be in trouble as the ball with be in the bears’ court.
Top Stock Trades for Tomorrow #5: Overstock (OSTK)
A name we liked in the past for a potential breakout candidate, Overstock (NASDAQ:OSTK) is setting up for another chance.
This $40 level has been a serious lid on OSTK dating back to March. Before that though, $40 was key support for OSTK. $30 is rough support, not that investors will want to hold through what would be more than $8 per share decline from current levels. Luckily, we side-stepped this decline last time.
So what’s the play? On a close over $40, investors can consider a long position. Below $40 and they can stop out, but a move through this big level of resistance could catapult OSTK higher.
A first reasonable target? $45 to $48, the latter of which would put the stock near its 200-day moving average.
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