Stocks hit record highs yet again on Monday, as the S&P 500 continues its march higher. Here’s a look at a few top stock trades making headlines.
Top Stock Trades for Tomorrow No. 1: McDonald’s (MCD)
The bearish pattern known as a descending triangle has played out in McDonald’s (NYSE:MCD). Shares continued to put in lower highs as downtrend resistance (blue line) kept squeezing shares lower against a static level of support.
Once support gave way, the stock really broke down. The selling hit a new low point Monday after the ouster of CEO Steve Easterbrook.
Now down about 15% from its highs, shares are approaching a key level of potential support. At the top of that support zone is also the 38.2% retracement. Should the $185 to $187.50 area fail to buoy MCD stock, the 23.6% retracement near $179.35 may come into play.
On a bounce, see if it can fill its gap up toward $193. Above that level puts the 200-day moving average on the table.
Top Stock Trades for Tomorrow No. 2: Under Armour (UAA)
It’s a tough day for Under Armour (NYSE:UA, NYSE:UAA) investors, after the company disclosed not one, but two accounting probes with its quarterly earnings results. The announcement sent shares spiraling lower by 20%.
Now below its August low and long-term uptrend support (purple line), UAA stock is badly wounded. I would not be surprised one bit to see shares hit and possibly take out the 52-week lows from December near $16.52.
Below $16 could accelerate the move lower. For those looking to buy, we need to see UAA form some type of bottom. Right now, Under Armour is a falling knife and trying to catch it can be dangerous.
The bottom line: Watch $16 to 16.50 for possible support.
Top Stock Trades for Tomorrow No. 3: Berkshire Hathaway (BRK.B)
The company released its third-quarter results this weekend, with Berkshire Hathaway (NYSE:BRK.B, NYSE:BRK.A) reporting record results. Give another tally to that wily Warren Buffett.
Now the Oracle will look to see if his company’s stock can run to new all-time highs. Shares cleared long-term downtrend resistance (blue line) on Friday, and that extension continued on Monday.
The $222 to $224 area is firmly in sight, a zone that held BRK.B in check in Q3 and Q4 2018. If shares get there soon, I’d look for this area to act as resistance on the first test, as BRK.B is nearing an overbought condition.
Top Stock Trades for Tomorrow No. 4: Bausch Health (BHC)
Bausch Health (NYSE:BHC) has only one thing in common with BRK.B and that’s the chart.
Like BRK.B, Bausch Health stock has broken over downtrend resistance (blue line) and is racing toward an area it has traditionally struggled with. Each time this year that BHC has rallied north of $26, it has failed to hit $27 before reversing lower.
It’s sporting an overbought condition as we speak (blue circle), and shares may be running out of momentum. If that’s the case, look for a decline back below $26.
Should BHC continue higher, look for a run north of $27, possible to the November 2018 high at $27.72 and a rally toward $28.50 above that.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities.
