We’re officially in the summer doldrums as the snoozy August trading sessions begin to set in. Despite that, we’ve still got some big movers under the surface, helping us set up our top stock trades going into Tuesday.
Top Stock Trades for Tomorrow #1: Snap (SNAP)
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I don’t usually like to outline stocks ahead of earnings, but Snap (NYSE:SNAP) has some levels that investors should be aware of. Snap reports on August 7th after the close.
If Snap is like Twitter (NYSE:TWTR) and Facebook (NASDAQ:FB), then shares could be in trouble. On the downside, look to see how Snap handles the backside of its prior downtrend resistance trend, near $11.50. Ironically, this would be a fall of 11.5% from current levels. If that fails, then the $10.50 lows are back in play.
If Snap is the social media anomaly, then we have to see how it handles three levels. Possible downtrend resistance near $13.50 is the first. The second and third hurdles could blend together, that being ~$14 and the 200-day moving average at $14.32.
If SNAP can clear those levels, a further rally (perhaps to $16) could be in the cards. Note: This isn’t a long or short call ahead of the report, only an outline of what levels to pay attention to.
Top Stock Trades for Tomorrow #2: Sprint (S)
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Shares of Sprint (NYSE:S) caught a 10% boost on Monday on whispers that the DOJ would reportedly be fine with three major U.S. telecoms. That seems to support its merger with T-Mobile (NASDAQ:TMUS), putting the duo up against AT&T (NYSE:T) and Verizon (NYSE:VZ).
Clearing the $5.75 level was big for S, as it’s now over all of its major moving averages as well. Pushing past $6.25 would be constructive, but truthfully, as long as it’s over $5.75, the stock looks okay.
But remember, this is M&A driven, so reports on this front will drive shares.
Top Stock Trades for Tomorrow #3: Newell (NWL)
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Newell Brands (NYSE:NWL) has had a lot of trouble lately, as bulls have to be discouraged by the stock’s 14% tumble. Despite its low valuation and 3.5% dividend yield, NWL just can’t catch a break.
I would be worried about Newell if shares lose the recent lows near $22.75. These lows were made in June, before a rebound into the mid-$20s.
So what now? If support holds up, look for a similar rebound. Four major moving averages — the 20, 50, 100 and 200-day — sit between $26 and $28, with resistance sitting at $28 as well. Upside traction will be hard to gain, but if the lows hold, a decent rebound can commence.
Top Stock Trades for Tomorrow #4: General Motors (GM)
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The most recent earnings report from General Motors (NYSE:GM) wasn’t great. The automaker was forced to cut its guidance amid an ongoing trade war and a stagnant U.S. auto market.
However, the low valuation, 4% dividend yield and promise for future mobility service growth must have been enough to convince investors to stick around. The $36 level has proven vital to GM, while trend-line support (purple line) has also played a role.
Momentum, via the MACD (blue circle) is also swinging in bulls’ favor. Below $36 and GM could get messy. Above and perhaps $39 is back in the cards.
Top Stock Trades for Tomorrow #5: Henry Schein (HSIC)
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This name isn’t talked about too often, but Henry Schein (NASDAQ:HSIC) has been on fire lately. While it couldn’t hold onto its gains Monday, investors are reacting favorably to its earnings.
After being nailed on collusion accusations and worries over Amazon (NASDAQ:AMZN) entering the market, shares have been in rally mode since March. Now though, HSIC is running into some resistance.
You’ll notice shares are overbought via the RSI measurement (blue circle). In other instances over the past few years, that has not boded well for HSIC. Further, the $83 to $86 area could act as resistance in the short-term.
Look for a pullback to at least $80 and perhaps even the 20-day moving average.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities.
