So much for quiet. After a rather boring Monday, investors were introduced to an increase in volatility. The S&P 500 dumped 1% at one point as investors try to get positioned ahead of the fourth quarter. Here are a few top stock trades.
Top Stock Trades for Tomorrow #1: Amazon
Amazon (NASDAQ:AMZN) has looked very pedestrian lately and Tuesday’s decline didn’t help matters. Shares are breaking below key uptrend support (blue line), as well as the 200-day moving average.
Now at $1,750, shares are teetering on the 50-week moving average (not shown on the daily chart above). Should the selling pressure intensify, look for a test of the June lows near $1,675. Below could usher in sub-$1,600.
If AMZN is able to reclaim the 200-day moving average, look for a potential rebound up to the 50-day moving average.
Top Stock Trades for Tomorrow #2: Cronos Group
What can we say about Cronos Group (NASDAQ:CRON) at this point? The cannabis trade has been a disaster and once $14 support gave way — as we highlighted at the time — the bears have been in control.
On Tuesday CRON broke to new 2019 lows. I’m not sure if it will retest its 52-week lows near $6.50 or not at this point.
This is a falling knife and bulls need to see some firming up action before even considering getting long. Either some sort of reversal, or reclaiming of notable levels like the 23.6% retracement or the 20-day moving average. Otherwise, lower prices are needed for it to be more interesting.
Top Stock Trades for Tomorrow #3: Tesla
Tesla (NASDAQ:TSLA) was hammered on Tuesday, falling more than 7% at one point. Amid its decline, the 20-day and 50-day moving average both failed as support. That’s reason for some caution.
There should be some support between $210 and $220, but traders may consider waiting it out with Tesla.
Meaning that if support holds, TSLA stock should rebound to the 50-day moving average. If it reclaims the 50-day, it puts higher prices on the table. If the 50-day is resistance, then another test of support is in order.
Should support fail at $210, sub-$200 is on the table with $180 being a possibility in that event.
Let price guide the way.
Top Stock Trades for Tomorrow #4: Shopify
We caught a $20 bounce in Shopify (NASDAQ:SHOP) when shares bounced from $340 support to $360. However, bulls are now staring at sub-$300 prices.
As my own personal rule of thumb, I start to look at many of these growth names when they’re down 35% to 40%. That may be a dumb rule, I’m not really sure. But it serves me well in instances involving stocks like Apple (NASDAQ:AAPL), Amazon and others. Roku (NASDAQ:ROKU) is there now.
At $266, SHOP stock will be down 35%, and down 40% at $245.
When these big momentum trades unwind, they’re almost impossible to time correctly. If the selling keeps up, an eventual test of the 200-day moving average may be in the cards.
The chart above does not suggest a clean trading environment, but it does offer levels that long-term investors may consider accumulating some additional shares.
Top Stock Trades for Tomorrow #5: BlackBerry
How disappointing has BlackBerry (NYSE:BB) been? Shares are down more than 20% on the day after underwhelming quarterly results.
Vital support at $6.50 has given way. Let’s see how BB does on a rebound to this spot. If it reclaims $6.50, bulls have a case on the long side. If it fails and $6.50 acts as resistance, bears are still in control.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long AAPL and ROKU.
