There were some interesting developments in regards to individual stocks, but as far as the overall market is concerned, Tuesday was a rather lackluster session. Let’s look at a few top stock trades.
Top Stock Trades for Tomorrow No. 1: Realty Income (O)
I’m not a REIT expert, but I do like to pick these dividend studs up when they’re under pressure. I’m not sure that Realty Income (NYSE:O) is near a bottom though, even if shares are trading down into support.
On O stock’s current decline, shares are falling into the $72 area, which was stiff resistance earlier this year, but support in September following the stock’s breakout in August. Only now, there’s also the 200-day moving average in the mix.
The upside here is that, should buyers step in at support, it’s a limited-risk long setup for the bulls. Either support will hold or it will fail and we’ll know very soon. The downside for investors is that, should buyers not step up here, it’s unclear where they will emerge. It might be at $70 or perhaps in the mid-to-upper $60s. It could be lower than that even.
For traders, though, this is a solid risk/reward setup, although it doesn’t help that the REIT space has been under considerable pressure.
Top Stock Trades for Tomorrow No. 2: Beyond Meat (BYND)
It’s not just REITs, as investors have seemingly lost their interest in Beyond Meat (NYSE:BYND) as well.
After topping out near $240 in July, the stock has slid considerably, now down to the mid-$70s. I don’t like the way downtrend resistance (blue line) is squeezing BYND against a static level of support near $72.
That’s the setup for a descending triangle, a bearish technical development. If support gives way, look out. Shares may tumble into the low-$60s, or even further, before buyers step in.
Should bulls bid BYND up off the mat, they need to clear downtrend resistance and the 20-day moving average. If they do, the declining 50-day moving average is the first upside target, followed by the $100 level.
Top Stock Trades for Tomorrow No. 3: Amazon (AMZN)
While the rest of big tech continues to grind up to new all-time highs, Amazon (NASDAQ:AMZN) remains stuck in the doldrums.
I suppose if there’s any positive takeaway, it’s that the stock continues to make a series of higher lows inside of a slowly rising channel (blue lines). But overall, it continues to lag the broader market, even with Tuesday’s 1% bump.
Keep it simple with Amazon. Dips down into channel support can be bought, while rallies into the 200-day moving average and channel resistance have been better selling points vs. buying points.
On a breakout over channel resistance, $2,000 may quickly become bulls’ preferred target. Below channel support, though and $1,700 is possible.
Top Stock Trades for Tomorrow Mo. 4: Boeing (BA)
Boeing (NYSE:BA) shares sank over 4% on Monday on reports about a production halt for its 737 MAX line. After the close, the company confirmed the plans, sending shares lower on Tuesday morning.
But interestingly, buyers stepped in, bidding the stock off its lows and pushing it back to break-even on the day. When a stock fails to fall on clearly bad news, it always catches my attention.
Shares are bouncing off range support and the 23.6% retracement. Bulls can use Tuesday’s low as their stop-loss if they are looking for a long trade from here. On a rebound, see if shares can fill the recent gap up to $341. Above that and its major moving averages are the next target.
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.
