After a morning gap up on positive trade news, U.S. stock made an ugly reversal. Bulls are trying to limit the damage, while the whole stock universe seems to be debating whether a potential trade deal between the U.S. and China will fuel the market to new all-time highs or become a sell-the-news event. In that respect, let’s start with the S&P 500 first on our must-see stock charts list.
Must-See Stock Charts for Tomorrow #1: S&P 500 ETF
The SPDR S&P 500 ETF (NYSEARCA:SPY) looked like it was ready to rip over $280 and keep its rally going. Instead, the ETF (and subsequently the market as a whole) topped out and fell abruptly in midday trading.
While it has recovered some of its intraday losses, this bearish engulfing candle — where today’s price action takes out the high and closes below the low — is surely getting investors’ attention. Whether it develops into something more remains to be seen.
Still in its trending range and above the 21-day moving average, bulls feeling mostly okay about the action — for now. Below these two marks and concerns will increase. It will almost surely mark a test of the 200-day at that point. Back over $280 and $285+ is possible.
Must-See Stock Charts for Tomorrow #2: AT&T
Thanks to some restructuring news over the past few days, AT&T (NYSE:T) stock has been under pressure. This gives bulls at least one more opportunity to get long this dividend stud, a consistency we pointed out last month that few companies can match.
However, we liked the name closer to the $29 level and with the action over the past few days, we’re getting there. Shares are clinging to the 50-day moving average now, but below that and $29 to $29.50 should come soon. However, those who want to buy now can justify their decision to lock in that yield.
Realize though that AT&T stock is an income play and that the charts look far from pretty. The stock is below most of its major moving averages and is trapped in a tough downtrend (blue line).
Must-See Stock Charts for Tomorrow #3: Salesforce
Salesforce (NYSE:CRM) will report earnings after the bell and its ~4% fall in Monday’s session helps bulls, oddly enough. Coming into the report red-hot is tough to digest, even on good results. If we get a positive reaction, look to see that CRM can get above and close over its prior highs near $165.
On a pullback, I would love to see the stock hold up near $147 to $149. Even if it breaks this mark initially, it would be bullish to get a close over this area, that being the 38.2% Fibonacci retracement and the 50-day moving average. Below and we open up the possibility of testing the 200-day and the 50% retracement near $143 and $140, respectively.
Must-See Stock Charts for Tomorrow #4: Workday
Unlike some its cloud-based peers, Workday (NASDAQ:WDAY) is not feeling the post-earnings love. Down about 6% on the day, the fall adds salt to the wound after Friday’s fall.
So far, the 50-day is holding as support, giving the bulls a level to shoot against. However, a washout down to $170 wouldn’t be the worst thing in the world. It gets WDAY down to a key level, which is also conveniently right near the 38.2% retracement mark.
Further, a drop below the 50-day will wash out a lot of short-term bulls who have been long this name since its Q4 lows, and thus, flush out some stop-loss orders. See how it trades over the next few sessions and whether the 50-day holds. If not, $170 is key.
Must-See Stock Charts for Tomorrow #5: Children’s Place
The Children’s Place (NYSE:PLCE) is falling more than 11% and hitting new 52-week lows after a massive earnings miss and coming up short on revenue, the latter of which contracted almost 7% year-over-year. I don’t know what’s worse, the chart or the quarter.
In either case, it doesn’t have me itching to pull the buy trigger. PLCE blew right through the $85 to $86 level, and a drop into the upper $70s is certainly possible. I’m not sure when buyers will step in, but I’m not one of them. Not without a level to measure against and while PLCE is in no man’s land.
Watch for an eventual retest of this $85 level. If it acts as resistance, bears have a level to short against.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long T.
