5 Top Stock Trades for Tuesday — Buy AMD, IQ and LULU?

top stock trades - 5 Top Stock Trades for Tuesday — Buy AMD, IQ and LULU?

Broader U.S. equities continued to rally Monday, with some outsized moves in a few specific names. It’s summer trading, and absent a rise in volatility, we could see equities slowly grind higher. Remember, don’t fight price! Here’s a look at our top stock trades for the week.

Top Stock Trades for Tomorrow #1: iQiyi

top stock trades for IQ
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Source: Chart courtesy of StockCharts.com

Directly impacted by the ongoing trade war between the U.S. and China or not, all sorts of Chinese stocks have been under pressure. iQiyi (NASDAQ:IQ) is no exception to that trend.

However, shares enjoyed a big bounce on Monday, climbing more than 8%.

Despite the rebound though, the coast is not all clear yet for IQ stock. We need to see the stock breakout of its falling wedge pattern now. Further, a move over the 20-day moving average would be encouraging for bulls as well.

If IQ can do so, a rebound up to the 50-day is in the cards. Above that, and a move into the mid- to upper-$30s is possible.

Top Stock Trades for Tomorrow #2: Micron

top stock trades for MU
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Source: Chart courtesy of StockCharts.com

We had previously said investors can buy Micron (NASDAQ:MU) on uptrend support. That came into play near $52, with a bounce resulting in a rally up to $58. The next retest of support failed though — a signal that investors should bail.

That would have been wise, after we saw MU dip below $46. Since then though, level support showed up and a bounce is underway.

While it’s hard to buy Micron now — up almost $3 per share from its recent lows — aggressive bulls now have a pinpoint risk/reward play.

Below the recent low and investors should bail. However, assuming MU can get above its 200-day moving average, a retest of the ~$53 area could be in the cards.

Top Stock Trades for Tomorrow #3: Advanced Micro Devices

top stock trades for AMD
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Source: Chart courtesy of StockCharts.com

Since gapping higher in June, shares of Advanced Micro Devices (NASDAQ:AMD) have been patiently chopping higher toward $20.

That’s pretty bullish action and short of a breakdown, there’s really no reason to get too bearish on AMD.

As long as AMD is above the 20-day moving average, bulls can justify staying long. The longer AMD stays over the 20-day, the more likely a breakout over $20 becomes.

Top Stock Trades for Tomorrow #4: Lululemon

top stock trades for LULU
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Source: Chart courtesy of StockCharts.com

Lululemon (NASDAQ:LULU) has been working out and has been a total stud this year. Shares are up about 70% since gapping higher in late-March. On Monday, LULU extended those gains with another 5% jump.

The company reports quarterly results on August 30th, and it looks like the stock could rally into the print. I don’t really like chasing 70% rallies, but Monday’s action was impressive.

Below channel resistance and bulls may want to exit LULU. However, should this level act as support (before or after earnings) it could signal a solid buying opportunity in the name.

Like I said, I am apprehensive to be a buyer today, but if either level (prior resistance or support) holds up, LULU is likely a buy. Particularly if earnings are out of the way. I would love a post-earnings decline on good results to one of these levels as a sure-fire buying opportunity.

Top Stock Trades for Tomorrow #5: Starbucks

top stock trades for SBUX
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Source: Chart courtesy of StockCharts.com

After bottoming near $47, Starbucks (NASDAQ:SBUX) has been on a strong rally. It helps that its dividend was nearing 3% and that its buyback is quite strong.

However, a rally back to this level has this long-time observer feeling leery about more upside in the short-term.

Shares are nearing overbought territory (blue circle) and a critical level near $55. Further, it’s less than 40 cents per share away from its 100-day moving average, which may cause at least a pause in SBUX stock. The 200-day is up at $55.60.

That said, I would expect SBUX stock to at least slow its roll a bit. A pullback to its 50-day would be a reasonable spot to buy, provided it holds as support.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell was long SBUX.


Article printed from InvestorPlace Media, https://investorplace.com/2018/08/5-top-stock-trades-for-tuesday-sbux-iq-amd-mu-lulu/.

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