After a slight bounce in early trading, stocks were under pressure again on Tuesday. Investors are clearly unwilling to take on too much risk ahead of the Federal Reserve’s interest rate announcement on Wednesday. On Monday we took a broader look at the market and key sectors, but on Tuesday let’s focus on a few individual names for our top stock trades.
Top Stock Trades for Tomorrow #1: Oracle
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Up first is Oracle (NASDAQ:ORCL), which beat on earnings and revenue expectations. As for a trade, this one is pretty simple.
The stock initially rallied, but could not sustain over its three major moving averages. However, support continues to come into play near $45.50. Below $45 and short-term bulls can stop-out with minimal losses.
On the upside, look for a test of downtrend resistance (blue line).
Top Stock Trades for Tomorrow #2: Micron
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Micron (NASDAQ:MU) will report earnings after the close. Both bulls and bears will be watching this one closely.
Shares are teetering just above $34 support and just below downtrend resistance at $36.50. To get out of this funk, MU needs to get above the 50-day moving average, which kept it in check at the beginning of the month. Below $34 and things can get ugly — even at 3.5 times earnings.
The most discouraging action would be a big rally on earnings and a fade at resistance.
Top Stock Trades for Tomorrow #3: Broadcom
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This is a name I absolutely love. Broadcom (NASDAQ:AVGO) beat on earnings and revenue expectations last quarter, raised its dividend 51% (now yielding over 4%) and provided better-than-expected guidance. Oh yeah, and it trades at less than 11 times this year’s earnings.
If we can get a pullback into the $240 to $245 area, bulls would be wise to snap it up. It’s crazy that this stock initially sold off on the report, giving investors a great buying opportunity. I like adding to this one on further weakness for a long-term position.
Top Stock Trades for Tomorrow #4: Snap
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I’m trying to decide which has been worse, Snap (NYSE:SNAP) or General Electric (NYSE:GE). Incidentally, both were on my list of three stocks to avoid this summer and they continue to rot more and more.
I wonder if Snap will see $5? It’s possible if it loses its lows here near $5.50. For bulls to gain any momentum, they need to see Snap close over the 21-day moving average. Short of that, and it can remain under pressure.
The problem though? As more support levels give way, they continually become resistance (black lines). As these levels stack up, SNAP has a harder and harder recovery in sight, never mind the moving average headaches.
Top Stock Trades for Tomorrow #5: Speaking of GE
Here’s a look at the other dud, General Electric. After charging over the 21-day moving average, GE buyers were dealt a swift intraday blow by the bears.
On the plus side the stock is trying to rally, something we haven’t seen in quite some time. A key analyst has lightened up on his bearish stance and while GE is far from a screaming buy, some are wondering if the name has bottomed.
Like Snap, bulls need to see this one get over the 21-day moving average. Eventually they will want to see it get back over the $8 level. However, staying over $7 is just as ideal and over the $6.66 lows is paramount to stick with this name. Otherwise, lower it is.
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.
