The markets opened the week with more losses, with trade-war worries still on investors’ minds. In particular, semiconductor stocks took a hit, but on the flip side, financials showed some resilience. It’s a tricky market in the short term and one investors need to be careful with. Let’s look at some must-see stock trades for Tuesday.
Must-See Stock Trades #1: T-Mobile
TMUS shares are jumping to new 52-week highs and over channel resistance on Monday. Interested buyers who were waiting for some clarity before getting long now have their chance. A pullback into prior channel resistance — now near $77 — could be their opportunity to get long.
A larger correction down to channel support and the 50-day moving average may also be an advantageous spot to initiate a position.
Must-See Stock Trades #2: Broadcom
Broadcom (NASDAQ:AVGO) stock has been hammered over the past few sessions. The stock fell 6% on Monday and has shed 10.5% over the last three trading days.
Where will it bottom?
I’m watching to see if AVGO will get down to $260. This $256 to $260 area has been notable over the past year, while the 50% retracement for the one-year range is at $257.70. Further, the 200-day moving average is just below at $253.76 and trending higher.
While AVGO already sports an attractive dividend yield of more than 3.9%, that yield would surpass 4% on a pullback to $260. Finally, shares are entering an overbought condition.
While I don’t really want to dabble much with stocks that could get caught in the trade-war crosshairs, this level offers a reasonable risk/reward in Broadcom stock.
Must-See Stock Trades #3: Burrito Breakout?
Chipotle Mexican Grill (NYSE:CMG) is flirting with a potential breakout right now. We highlighted this stock as an important one to watch given how strong it has been in the face of market-wide weakness. Learn to spot the stocks showing relative weakness.
In any regard, the $721 level has kept a lid on CMG stock since April, but now shares are pushing through. Coupled with a series of higher lows and all of CMG’s moving averages trending higher, and this one looks good for more upside.
Look for a slightly lower open on Tuesday to see if CMG maintains or recovers this $721 level. A quick recovery likely sends it to new highs. A false breakout could send shares down to the 50-day.
Must-See Stock Trades #4: AT&T
T stock has since given up most of those intraday gains, as the 200-week moving average is — for now at least — keeping a lid on the stock. A weekly close over $32.31 would gives us confidence more gains can be had.
Otherwise, we’ll have to see how T does on a pullback into the $30.40 to $31.40 area and see if it can put in another higher low. AT&T has been doing well, but Monday’s pop-and-flop is a bit discouraging.
Must-See Stock Trades #5: Stitch Fix
Up 5% on the day and Stitch Fix (NASDAQ:SFIX) is looking better. However, the stock is far from out of the woods.
Shares are lodged in a downtrend and are bouncing off channel support on Monday. I first want to see if SFIX can push through the $24 to $24.35 area. If it can, it sets up a test of its 20-day moving average and channel resistance near $25.32 to $25.50. Above that and it can gain some real momentum, but for now, I’m in the wait-and-see camp rather than the benefit-of-the-doubt camp.
If $24 to $24.35 is resistance, look for another test of channel support.