The market’s sidestepped a big market selloff last Monday. This Monday, it wasn’t so fortunate. At its lows, the Russell 2000 and Nasdaq were both down more than 3%, although some positive trade talk did give stocks an afternoon lift. Let’s look at a few names that are in the headlines, giving us some juicy top stock trades to watch.
Top Stock Trades for Tomorrow #1: Amazon
Amazon (NASDAQ:AMZN) falling to and testing the 50-day moving average will almost surely attract some dip buyers. The stock is $130 off its recent highs and testing a key moving average. Many popular names are getting hit right now.
I might miss my chance in AMZN by waiting, but I’m looking for a slightly deeper correction. If we can get a pullback in Amazon down to the 200-day moving average near $1,755, shares will be down just over 10% from the recent highs.
It’ll also be bumping into prior resistance, which will hopefully act as support. Between this and the 200-day moving average, AMZN stock should at least give us a good bounce should it fall that far.
Top Stock Trades for Tomorrow #2: Uber
Click to EnlargeFriday was an ugly day one for Uber (NYSE:UBER) and day two isn’t shaping up much better, with shares falling another 11%. I don’t know where or when Uber will bottom, but it feels like more selling is on the horizon. If the market selloff continues, don’t look to Uber for safety.
While Lyft (NASDAQ:LYFT) had a much better day-one open than Uber, it too has been a train wreck. Shares are now below $50 and down more than 45% from its opening print.
If you’re thinking about investing in Uber for the next five to 10 years, that’s one thing, (I don’t know if it’s a good price or not). But if you’re looking to trade this one, I would avoid it for now. The stock is too wild and the risk can’t be defined yet.
Top Stock Trades for Tomorrow #3: Teva
The 200-week moving average stymied any potential rally in the second half of 2018 and the 10-week moving average kept a lid on each potential rally in 2019 too. It has continued to squeeze Teva lower and has kept the stock in a nasty downtrend.
Now what? A rally back to prior downtrend support may be in the cards, but it’s also likely that this level acts as resistance moving forward. Teva may be setting up for a retest of its lows near $11.50. It may find buyers there, at least in the short term.
Top Stock Trades for Tomorrow #4: Zscaler
Over the weekend, I was looking for stocks that displayed strength in the previous week amid heightened volatility and increased selling pressure. Zscaler (NASDAQ:ZS) was one of them, even though the stock is down almost 5% on Monday.
That nixed the breakout over $72.50, but with the markets down so heavily on the day, it’s no surprise. I want to see this one pullback a little further into that 20-day/50-day moving average conflux, as well as uptrend support in the same area.
If it does and the pullback holds, ZS is a buy in my mind for the short-term. A break of $65 spells trouble.
Top Stock Trades for Tomorrow #5: S&P 500 ETF
The 50-day temporarily broke but ultimately held for the SPDR S&P 500 ETF (NYSEARCA:SPY) over prior two sessions before we got to Monday. To start the week though, the SPY gapped below the 50-day and opened near Friday’s lows, where it promptly failed and moved even lower.
Leading up to the break, the 20-day was acting as resistance, a clue that the trend had changed and investors were positioning themselves in a less-aggressive manner. I would look for a bit more downside now. At $275 we have the 200-day and around $277 was a big resistance level in the fourth quarter.
If those levels act as support, we could get a decent bounce — perhaps back up to the 50-day — as we continue to digest trade-war headlines.