Worries over an inverting yield curve, a solid predictor of future recessions, caused investors to worry last week. However, they are having trouble pinning down whether it’s a natural function of the bond market or a circumstance of artificially low global rates and a Fed that’s been raising short-term rates. Let’s use that to lead into our top stock trades for Tuesday.
Top Stock Trades for Tomorrow #1: Bank of America
Bank of America (NYSE:BAC) was hammered last week on these yield inversion worries. Right as the stock was breaking out beautifully over $29.50, shares tumbled back below resistance and cratered toward $28 support.
However, that level didn’t provide much help, as BAC quickly fell below $27 last week. After consolidating those losses, shares are showing some life now back above $28.50 and BAC is looking much better.
It’s not out of the woods yet, though. Bulls need to see $28 hold as support. Preferably, it can move higher and close above the 50-day moving average later this week. But limiting our risk is key and that means holding $28. If that fails, $27.50 and last week’s lows are possible. If it holds, $29.50 resistance is back on the table.
Top Stock Trades for Tomorrow #2: Netflix
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Netflix (NASDAQ:NFLX) continues to slowly chop higher, putting in a series of higher lows and higher highs (purple arrows). $380 is proving to be a key level and should shares breakout over this mark, a run to $400 is possible.
Channel support and the 50-day moving average are key right now. A close below this mark puts a retest of the 200-day back on the table. Keep it simple.
Top Stock Trades for Tomorrow #3: Intel
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This $54 to $55 level has been notable in the past for Intel (NASDAQ:INTC). If Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD) and other chip makers can remain hot, bulls will certainly be looking for a breakout in INTC over this level.
If it does, it certainly puts the prior highs near $56 in play, while Intel has rather quietly been performing quite well. If resistance holds up, look for a buying opportunity near uptrend support/the 50-day moving average. More aggressive bulls can buy a test-and-hold of the 20-day moving average.
Top Stock Trades for Tomorrow #4: Activision Blizzard
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Wedbush analysts named Activision Blizzard (NASDAQ:ATVI) one of its best ideas on Monday, helping the stock to a 3% gain on the day. After hitting a low near $40 in February, shares have been steadily trending higher, putting in a series of higher lows.
It’s now above its 50-day and 20-day moving averages and a close over $48 could really ignite this name. If it can, $55 is a potential upside target, while a run to the 200-day could eventually be in the cards after some consolidation.
However, if this stock loses the $45 level and the 50-day, it could be in trouble. The decline below $40 didn’t pan out, but keep in mind, the 200-week moving average is up near $50.
Top Stock Trades for Tomorrow #5: Tandem Diabetes Care
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While the rest of the market is enjoying nice gains on the day, Tandem Diabetes Care (NASDAQ:TNDM) is not. Shares are down almost 6% on Monday — and more losses could be on the way.
The late-February gap-up open came near $60 and this level has buoyed the stock several times since. However, the 20-day moving average is now acting as resistance, while uptrend support is down near $57.50. The downside targets then include the 50-day and the gap-fill down near $50.
In the short-term and on the long side, I need to see $50 hold as support and TNDM close above the 20-day to be interested in buying.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long NVDA.
