On Sunday night, President Trump tweeted that trade talks were progressing too slowly with China and that he planned to increase certain tariffs as a result. This sent futures tumbling in the overnight session, although many bulls should be cheering the market’s resilience on Monday. Let’s look at some top stock trades in light of the market’s action.
Top Stock Trades for Tomorrow #1: Pinterest
Shares of Pinterest (NYSE:PINS) have been on fire since the company went public in mid-April. The IPO was priced at $19 and ran higher for seven straight days. On the eighth, it opened higher and tagged a new all-time high at $35.29 before embarking on a multi-day pullback.
Pinterest gapped down below $28 on Monday, but has reversed higher and is showing excellent relative strength on the day. I really like PINS here and tried to get a fill in the morning. Unfortunately, I did not. But sub-$28 looks good for an initial position for long-term investors.
Over $30 and PINS can breakout, potentially giving short-term traders a nice payout.
Top Stock Trades for Tomorrow #2: General Electric
After reporting earnings in April, General Electric (NYSE:GE) is opting for higher prices rather than lower. We outlined the stock ahead of time, saying it was vital for it to hold $9 support. From there, should the stock rally, we wanted to see how it did with its conflux of moving averages between $9.85 and $10. It did well, pushing through all three major moving averages.
Now hovering near $10.40, GE stock is at long-term downtrend resistance. It’s also contending with short-term range resistance. Should it breakout over this area, bulls will likely turn their attention to $12. On a pullback, I would really like to see $9.85 hold as support, maintaining those post-earnings gains and notching a short-term higher low.
Finally, keep note of how many times GE has flirted with this $10.50 level. It doesn’t always hold when it pushes through.
Top Stock Trades for Tomorrow #3: Cisco Systems
CSCO shares pulled back to and held the 50-day moving average. The stock also filled its gap from back in March and a potential rebound could be in store. I like Cisco on the long side here against Monday’s low. Below and a larger decline could ensue.
Otherwise, a press back to $55 and the 20-day moving average could be in the cards, with potentially higher prices on the table depending on momentum.
Top Stock Trades for Tomorrow #4: Tyson Foods
What a beast Tyson Foods (NYSE:TSN) has been. This stock has been surging all year — up more than 50% from its December lows — and by the looks of Monday’s action, you wouldn’t even know that the market was feeling any heat.
TSN stock is up 2.6% after the company beat on earnings and revenue expectations. Shares are hitting 52-week highs as a result.
Its relative strength and momentum is attractive, but with an RSI pushing 80 and with shares near channel resistance, now may not be the best time to buy TSN stock. Shares may have upside to $78 and overshoot to $79 or possibly as high as $80, but I would rather look for a buy on channel support.
Should shares pullback and channel support fails, see how the the 20-day holds up. Below that and a dip into the $72 to $72.50 area could be a good spot to try a long position.
Top Stock Trades for Tomorrow #5: Ferrari
Ferrari (NYSE:RACE) will report earnings on Tuesday and the stock is losing some traction.
After hitting resistance in mid-April, Ferrari quickly lost the 20-day moving average, which quickly turned to resistance. On Monday, it gapped below the 50-day moving average and failed to get back above it. It’s also below uptrend support (blue line).
That’s not very encouraging action!
I want to see a few things after the company reports. On the downside, should RACE pullback, I want to see the 200-day moving average hold as support. Should shares rally, I want see if $140 acts as resistance. If it doesn’t, a potential breakout can commence. If it does, I need to see the 20-day and 50-day moving averages hold as support.