Investors haven’t had much time to make adjustments or try to sell into strength since the selloff began last week. It’s crazy to think the Dow has shed over 1,500 points in just a few days following the Fed’s rate cut decision. The market’s big fall on Monday dealt a serious blow to a number of individual stocks. Let’s look at some top stock trades.
Top Stock Trades for Tomorrow #1: Amazon
Amazon (NASDAQ:AMZN) hasn’t been trading well since reporting earnings last month, but it’s a name almost every investor watches.
Shares are now down eight days in a row and off more than 12% from late July. That seems a bit excessive to me, particularly as we near an important juncture.
AMZN stock has the 38.2% retracement at $1,766, the 200-day moving average at $1,750 and channel support (blue line) near $1,745. If bulls are looking to dip their toe in the water near a well-defined potential support zone, this area is as good as any.
A close below trend-line support justifies stopping out of the position. A bounce could send Amazon back up to its 20-day and 50-day moving averages currently near $1,900.
Top Stock Trades for Tomorrow #2: Alphabet
Unlike AMZN, Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) had a great reaction to its quarterly report. However, since its 10% gap-up last month, it has endured six straight declines. Also disappointing is GOOGL’s inability to hold the 20-day moving average, 38.2% retracement and the key $1,160 level as support.
Shares are down almost 10% from its post-earnings close, dealing bulls’ a very tough blow on what were strong earnings. However, it also gives them an opportunity to acquire more shares.
On a slightly deeper decline, GOOGL has the 50% retracement at $1,137, and the 50-day, 200-day moving average confluence near $1,124. At the 50% retracement, GOOGL will also fill the gap from earnings.
Bulls can justify nibbling GOOGL on a pullback into the $1,125 to $1,140 area. Should it continue falling, the 61.8% comes into play near $1,100, while $1,000 to $1,020 has been pretty strong support in the past.
Top Stock Trades for Tomorrow #3: Boeing
What an ugly ride it’s been for Boeing (NYSE:BA). However, InvestorPlace readers knew that once $360 support gave way, BA stock was in trouble. We’ve been discussing that setup on and off now for a few months, so its breakdown should come as little surprise.
Now that prior support has become resistance, BA stock is probing for a new level of support. Back when $360 was resistance in 2018, the $323 level was a rough area of range support. Should it buoy BA stock again in the short-term, see if it can bounce up to the 10-week moving average.
If the selling accelerates, a break down to $300 could be in the cards. For now, BA could be range-bound between $320 to $330 on the downside and ~$360 on the upside.
Top Stock Trades for Tomorrow #4: Nio
Despite the big run Nio (NASDAQ:NIO) had been on — perhaps spurred on by Tesla (NASDAQ:TSLA) — the bears finally caught ahold of it. Downtrend resistance (blue line) kept Nio in check, while the 50-day moving average and key $3.00 level gave way on Monday.
If Nio can reclaim these levels, it may rally back to downtrend resistance. However, should shares keep falling, ~$2.50 looks to be on the table, with its 52-week low at $2.35 below that.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long GOOGL and AMZN.
