The stock market remained a bumpy ride on Friday, with shares whipsawing back and forth after making new lows going into the weekend. It’s got some investors looking for a full-blown meltdown and others thinking the worst is close to being over. Here are our top stock trades amid the chaos.
Alphabet (GOOG)
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is having a mixed reaction to its earnings report. After breaking below its descending channel, shares have now stumbled below all three major moving averages.
Will we get a chance to buy at $1,000?
Maybe. The stock market still hasn’t felt panicky yet, but at the same time could be showing some signs of stabilizing. In other words, it’s a bit of a mixed bag.
GOOGL rallied Friday, but couldn’t get back above the prior support leg of its descending channel (blue line). Getting back above this mark and prior uptrend support (black line) are paramount to a recovery.
Otherwise, look for a chance to buy near $1,000.
Snap Inc (SNAP)
We have never liked Snap (NYSE:SNAP) and even below $6, we still don’t. At some point the stock will bottom, but my hard-earned dollars won’t be used to find out when.
Snap-on Stock Slides Lower on Revenue Miss
For longs to get excited over Snap, they should wait for the stock to close above downtrend resistance (blue line) and the 20-day moving average. Otherwise, we’re just trying to catch a falling knife.
Tesla (TSLA)
Tesla (NASDAQ:TSLA) is one of the few stocks doing well this week, with the exception of Friday’s news regarding another criminal investigation. Investors are still trying to make sense of the news and get a sense of the new information. After earnings though, this name has been trading well.
With the 200-week moving average support bending but not breaking, shares now find themselves over all three major moving averages, as well as downtrend resistance and the critical $300 to $310 level.
Over this mark, bulls can stay long. Below and they should get defensive.
Advanced Micro Devices (AMD)
The other day we said we liked Advanced Micro Devices (NASDAQ:AMD) on a dip to its 200-day moving average. We didn’t know that there’d be another 13% drop on Friday to make to it come to fruition.
But it did and while a decline to the 200-day doesn’t resolve AMD of its issues, it gives traders a much better risk/reward than buying blindly. Bulls can nibble AMD near current levels and bail on a close below the 200-day. Keep it simple.
Caterpillar (CAT)
Whoa, what’s been up with Caterpillar (NYSE:CAT)? Earlier this month, CAT was threatening to break out to its prior highs, but stopped short just below $160. Just a few weeks later and here we are at $114, a decline of roughly 30%.
For now, shares are stabilizing with a low near $112. Aggressive buyers can go long CAT and use $110 as their stop-loss. Below that and we’ll have taken out the recent lows and could fall even further.
Above the Thursday/Friday high and we could run back to the gap level near $122.50 and possibly fill the gap back up to $128 if the market is rebounding.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long GOOGL.
