It was a tough day on Wall Street, with investors hitting the exits on trade worries, concerns over Hong Kong, and as bond prices again rally. The markets are often volatile in August, and 2019 is proving to be no exception. Here are a few top stock trades to watch.
Top Stock Trades for Tomorrow No. 1: Roku
At one point, Roku (NASDAQ:ROKU) stock was up 8% on Monday. The move adds to Roku’s three-day gain, with shares up more than 30% since reporting earnings last week.
Monday’s move was inspired by the analysts at Nomura, who upped their price target to $150 per share. Despite the big move, shares are hardly overbought — at least technically speaking via the RSI indicator (blue circle).
A move into the upper $130s or lower $140s is still possible, with a Fibonacci extension near the latter. If the overall selling pressure in the market is too great, though, Roku may not be immune. In that case, see if prior short-term channel resistance (black line) can act as support on a pullback.
Top Stock Trades for Tomorrow No. 2: Pinterest
Pinterest (NYSE:PINS) outperformed the market on Monday, but did so in a very strange way.
In midday trading, shares suddenly spiked higher, surging to $36 before retreating and giving up almost all of its 6% intraday gain. $34 remains a tough level for the stock, even after its strong earnings report last week.
That said, it continues to hold $32 and its 8-day moving average. However, like other stocks, support may give way should overall market selling pressure pick up. Keep an eye on $32 support, and $31.50 just below that. Breakout traders may consider going long PINS on a close over $34.
Top Stock Trades for Tomorrow No. 3: Netflix
Netflix (NASDAQ:NFLX) stock held up okay on Monday, but its chart still looks concerning. Below, the $305 to $310 level is a concern. It will put the August lows near $297 on the table. A close below that opens up NFLX to a decline down the $270 to $275 area.
On a rally, see if NFLX stock can reclaim its 20-day moving average. If it can, its 200-day is the next upside target.
Top Stock Trades for Tomorrow No. 4: Deere
Deere (NYSE:DE) stock is looking ugly. Shares rallied into former support at $155 as well as its 200-day moving average before tumbling more than 4% on Monday. The company reports earnings on Friday, adding more volatility into the stock.
At this point, DE stock either needs to reclaim the $155/200-day moving average area or pull back to range support near $135.
Top Stock Trades for Tomorrow No. 5: McDonald’s
McDonald’s (NYSE:MCD) stock may be a flight-to-safety name, but shares are under pressure on a day where the stock market is in decline as well.
The selling pressure comes as shares run into channel resistance. Now I’m looking for a test of channel support. That would put MCD in play somewhere near $213. As much as I’d hate to see MCD break channel support, a dip to $210 and the 50-day moving average would also be attractive.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long ROKU and PINS.
