It was a quiet day for the market indices, with the S&P 500 falling just a couple of basis points. But we had a ton of news and movers among individual stocks. Let’s take a closer look at some top stock trades for Tuesday.
Top Stock Trades for Tomorrow #1: Shopify
Click to Enlarge
We saw a beating in high-octane growth stocks Monday morning, as a bearish article in Barron’s sent a rippling effect through the group. Shopify (NASDAQ:SHOP) was among those hit, falling over 5.5% on the day.
Currently, it’s got SHOP stock below its 20-day moving average. Keep in mind, this stock has broke this moving average multiple times throughout 2019, but it’s been an excellent buoy thus far.
If a bounce doesn’t come soon, we could see shares of SHOP drop to its 50-day moving average. Whether we get to the 50-day or not, it will be important to see how SHOP handles the 20-day on the way up. Meaning, does it quickly reclaim this mark or does it act as resistance?
If the 50-day fails, look for a possible test of $280.
Top Stock Trades for Tomorrow #2: Netflix
Click to Enlarge
We’ve seen a quick bounce in Netflix (NASDAQ:NFLX), but now it’s key to determine if it’s simply a dead-cat bounce or if it’s a reversal with staying power.
If it’s the latter, bulls need to see NFLX push through the 200-day moving average and reclaim prior range support near $340. If it’s the former and just a dead-cat bounce, this area is likely to act as resistance. In that case, let’s see what level acts as support on a pullback and whether the lows near $305 can hold.
Top Stock Trades for Tomorrow #3: Johnson & Johnson
Click to Enlarge
Last week, Johnson & Johnson (NYSE:JNJ) held the $128 level and quickly reclaimed the $130 mark. That’s an important move for bulls and gives new buyers a well-defined risk/reward.
Those who bought Monday morning near $130 have to be happy, but those who get in now must make sure it stays above this level. Under $130 puts $128 back on watch and a close below this mark is a reasonable stop-out.
On the upside, see how JNJ handles its major moving averages. If it can eventually push through, $139 to $140 could be on the table.
Top Stock Trades for Tomorrow #4: Tanger Factory Outlet Centers
Click to Enlarge
REITs are starting to wake up, particularly with an expected rate cut from the Fed looming. While many have performed well this year, Tanger Factory Outlet Centers (NYSE:SKT) is certainly not one of them.
Shares are down 30% over the past year and 18.5% so far in 2019. Even with an 8.6% yield, it’s been an ugly year for investors.
However, the stock has been perking up lately. Shares have pushed through and successfully held above prior downtrend resistance (blue line) on the retest. It’s also strung together a series of higher lows (purple line), while reclaiming the 20-day moving average.
This moving average has been guiding SKT stock higher, while the 50-day has been acting as resistance. If SKT is able to breakout over the 50-day, and it looks like it wants to, then it could open up a run into the $17.70 to $18 area.
Should the 50-day continue to act as resistance, see that uptrend support holds as support. If it doesn’t and $16 gives way, a retest of the lows could be in the cards.
Top Stock Trades for Tomorrow #5: Veeva Systems
Click to Enlarge
Like Shopify, Veeva Systems (NASDAQ:VEEV) took it on the chin Monday, falling over 6% at one point. It’s got the stock right down into its 50-day moving average.
This stock has spent most of its time in a sharp uptrend, so the action is surely drawing in a few bulls. The question is, will the 50-day hold as support and bounce the stock or will a deeper correction take hold?
If it’s the former, see that VEEV reclaims prior channel support near $165 and the 20-day at $167.68. If it’s the latter, let’s see if uptrend support (purple line) holds as support. Should it fail, $145 could be in the cards.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long SKT and SHOP.
