The stock market made plenty of moves on Tuesday, but it didn’t show much in the overall indices. Is the market trying to carve out a bottom or just pausing ahead of more selling? That likely depends on bond yields and sentiment. But for now, we have a bit of a push in terms of top stock trades — some names are winning while others are hitting new lows. Let’s have a look.
Top Stock Trades for Tomorrow #1: Starbucks
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Bill Ackman has a position in Starbucks (NASDAQ:SBUX) and now suddenly it’s the hottest thing on Wall Street?
Well, not really. Shares are up more than 2% as a result and got a nice boost in early Tuesday trading. But the truth is, SBUX has been on fire for a while now and as we pointed out, continues to hold up amid the volatility. This has been a great name to hideout in as it vastly outperforms the market.
Clearing this $59 to $60 region may be tough to break above, but if SBUX can do it, it gives buyers a great level to trade against. Conversely, if SBUX can close above downtrend resistance (blue line), then bulls may very well stay long the name. If it can’t, look for that steep uptrend (black line) and 200-day moving average to buoy the name.
With earnings due up later this month, SBUX stock is certainly one to watch.
Top Stock Trades for Tomorrow #2: Facebook
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Is Facebook (NASDAQ:FB) at the bottom or fighting an inevitable return to $150?
So far, the $155 area is holding, a level that dates back to mid-2017 and also serves as the 61.8% Fibonacci retracement on the two-year chart (not shown). However, the 20-day moving average and downtrend resistance (blue line) has kept a lid on Facebook.
In this type of climate, I would wait for Facebook stock to close above this levels before going long. Aggressive bulls can buy on a retest of the $155 level, while conservative bulls may wait for a pullback to the April lows of $150.
On a rebound, $170 could be resistance.
Top Stock Trades for Tomorrow #3: Ford
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This sorry stock continues to burn lower and lower as Ford (NYSE:F) watches its dividend yield creep closer to 7%. Don’t be tempted though.
Hopefully we kept investors out of trouble when we said to avoid this one last month as it was trying to mount a rally. We said to avoid the name until, at the very least, it could close above $10. Highlighted by the blue oval, you can see where this vital support level turned into resistance. We have not liked Ford for a very long time, as its stock remains in a very discouraging slump.
So where to now? It looks like it will work its way down to about $8.75, the flash-crash low from 2015 (dashed line). To go long we need to see a change in momentum and we’re just not seeing that yet.
Top Stock Trades for Tomorrow #4: Advanced Micro Devices
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Advanced Micro Devices (NASDAQ:AMD) is giving us great action on Tuesday.
Shares are bouncing off two vital layers of support: the 50-day moving average and uptrend support. Both have been relevant since April and have played a large role in AMD stock tripling in less than five months. Further, shares are breaking out of a descending channel.
At the very least — provided the market cooperates — I expect a retest of the 20-day moving average up near $29. If it can clear this mark, a run into the low-$30s should be in the cards.
A close below the 50-day and uptrend support is a reasonable stop-loss.
Top Stock Trades for Tomorrow #5: Intel
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There are a few pros and cons for Intel (NASDAQ:INTC) at this point. On the plus side, shares technically cleared downtrend resistance (purple line) and are putting in a series of higher lows (blue line).
However, the negatives are notable. For starters, the broader market and Nasdaq have been under heavy pressure the past few days. Should that continue, INTC does not have a healthy enough chart to fight the likely onslaught of sell orders it will face. A break below $46 will put it below multiple levels of support, including both the blue and purple lines laid out above. It’s also below and unable to get above all three major moving averages.
So what do we do? Should Intel weaken just a bit more, I would play for a drop down to the September lows near $44 as my first target. Should weakness persist, look for a decline down toward $42. At this level though, I’d be a buyer, not a seller.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long SBUX and AMD.
