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
I like AT&T (NYSE:T) for its cash flow and dividend, but the stock’s aggressive rally on Monday morning certainly caught my eye. The stock has been moving much better over the past few sessions and Monday morning’s 4% jolt was nice… at least while it lasted.
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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.