Ongoing trade-war drama continues to send a deluge of headlines, whipping the market up and down as the VIX remains elevated. Let’s look at a few top stock trades as we approach mid-week.
Top Stock Trades for Tomorrow No. 1: Chesapeake Energy (CHK)
Chesapeake Energy (NYSE:CHK) just can’t seem to get out of its funk. Investors have liked this name because of its low stock price and big moves. Not me.
Below $5 and the volatility is too rich for my blood. Investors can wake up to moves of 20% or more. When shares are below $5, Wall Street has made it known there is little love for the stock.
In the case of CHK, shares are dangling by a thread. The stock continues to bobble along the $1.30 area, which has buoyed it since August. Should CHK move decisively below this mark, $1 could be next.
Below $1 and CHK may find trouble staying listed with the NYSE.
Top Stock Trades for Tomorrow No. 2: Target (TGT)
On the totally opposite spectrum, Target (NYSE:TGT) continues to hum along nicely. This one has not only maintained its gains from the post-earnings surge in August, but has actually added to them in recent weeks.
The stock is a great relative strength play and I can’t emphasize enough how important it is to identify these candidates.
In any regard, look for a close over $110 in TGT stock. If we get it, this could kickstart a breakout in the name. Below $104 and the stock could test the 50-day moving average.
Top Stock Trades for Tomorrow No. 3: GameStop (GME)
Like CHK, GameStop (NYSE:GME) continues to struggle in 2019. The market has not been friendly to retail plays without staying power, and GME is no exception. It was one we said might not make it earlier this year.
In June we also said it’s not a buy at $5, which was good because shares bottomed at $3.15 in August.
You know it’s bad when a 5% drop hardly registers on the daily chart, such as we see in the chart above via Tuesday’s action. I don’t like trading GME for the same reasons as CHK. However, for those that are watching this name, keep an eye on $5.85.
Above it could trigger a gap-fill back up to $7.50. However, keep an eye on $5 as well. Below it puts GME below uptrend support (purple line) and the 100-day moving average. While the 50-day may buoy the name after that, it could be the start of more selling, so use caution below $5.
Top Stock Trades for Tomorrow No. 4: Domino’s Pizza (DPZ)
I want to see DPZ stock maintain above short-term resistance at $248, as well as the 61.8% retracement near $250. On the upside, let’s see if shares can clear $260. If so, it puts it above the 100-day and 200-day moving averages at $256.89 and $258.24, respectively, as well as the 50% retracement.
Below $248 puts the 50-day moving average back on the table. Below that puts the Tuesday low in the realm of possibilities.