5 Top Stock Trades for Tuesday: Trading Bank Earnings

Here are the top stock trades we're watching for Tuesday morning

top stock trades - 5 Top Stock Trades for Tuesday: Trading Bank Earnings

A late-afternoon bounce in U.S. equities helped lift investors’ spirits, but doubts still linger as key indices hang near their 200-day moving averages and as tech continues to struggle ahead of earnings season. Here are our top stock trades to start the week.

Top Stock Trades for Tomorrow #1: Bank of America

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

A top and bottom line beat doesn’t get you very much. Investors saw that on Friday from JPMorgan (NYSE:JPM) and again on Monday from Bank of America (NYSE:BAC).

Bank of America fell several percent before rebounding toward flat in Monday’s session. The great thing about many of these banks? The risk/reward.

Buyers can step into BAC stock knowing that a close below $27 can be their stop-loss. With earnings off the table, we have less headline risk to worry about and a rebound up to the $29.50 to $30 area is on the table.

Traders got a chance to buy at $27.65 today, and if they’re frequent users of Twitter, I had a callout for them.

Top Stock Trades for Tomorrow #2: Charles Schwab

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

Like BAC, Charles Schwab (NYSE:SCHW) also reported earnings. However, unlike BAC, SCHW does not have as good of a setup.

SCHW stock rallied to and failed to get above prior support at $49. It’s now clinging to its February low at $48. Curious bulls can take a flyer on this with a tight stop if they want, but I’d rather buy this on a close over support, which is now shaping up as a resistance.

Top Stock Trades for Tomorrow #3: Goldman Sachs

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

Sticking with bank earnings, Goldman Sachs (NYSE:GS) will report its quarterly results on Tuesday before the open. Currently, shares are bumbling around the bottom of its trading range near $215.

So far, we’ve seen a mixed reaction to bank earnings, but the volatility has been pretty low. Up or down a few percent is nothing to get to worked up over and it’s likely we’ll see a similar move out of GS.

If bulls want to go long, keep in mind that a close below $210 would thrust the stock into no man’s land.

Top Stock Trades for Tomorrow #4: Johnson & Johnson

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

Sharing the spotlight on Tuesday morning with Goldman Sachs will be the quarterly report from Johnson & Johnson (NYSE:JNJ).

The market ruined the excellent, albeit unsustainable uptrend for JNJ (blue line), as shares have now fallen about $10 per share from the recent highs. As long as JNJ stays over this line-in-the-sand at $132, bulls can stay long.

For those with a longer term outlook, over the $130 level and JNJ still looks constructive. On a rally, see how JNJ handles that $136 to $137 level, where the 20-day and 50-day moving averages currently rest.

Top Stock Trades for Tomorrow #5: Activision Blizzard

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

No earnings for Activision Blizzard (NASDAQ:ATVI), but the company did release its flagship Call of Duty video game this weekend. Shares popped on Friday and pooped on Monday, falling about 2% to the end day. What now?

Bulls can stay bullish so long as ATVI stays above trend and the 200-day moving average. It’s great seeing ATVI fight to stay above the 50-day and it puts the top of its channel range back in play, currently up in the mid-$80s.

Of course, the broader market will need to play a role in it getting there, but crazier things have happened. On the downside, a break below the 200-day moving average could get ATVI down to that $66 to $67 level, but also remember that it does chop around the 200-day from time to time. Unless markets are really dicey and if bulls are more long-term than short-term, I would use a looser stop-loss than 200-day as a result.

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

Article printed from InvestorPlace Media, https://investorplace.com/2018/10/5-top-stock-trades-bank-earnings-bac-gs-schw-jnj-atvi/.

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