The markets initially rallied on Tuesday, as the Federal Reserve cut interest rates by 50 basis points. However, volatility then surged as equities fell lower. That said, let’s look at a few top stock trades for Wednesday.
Also, just as a reminder, be careful trading out there. Realize cash is a position and not all environments are suitable for trading. When the Volatility Index is $30 to $35-plus, all sorts of moves can be senseless and erratic. If this isn’t your style — and it isn’t for a lot of people — there’s no shame in waiting for things to cool off a bit.
Top Stock Trades for Tomorrow No. 1: Tesla (TSLA)
Click to Enlarge
Tesla (NASDAQ:TSLA) would not be the first safe-haven play for me amid a high-volatility trading environment. But it’s got investors’ attention, as shares were popping more than 7% at one point on Thursday.
On Friday, Tesla shares bounced hard off the 50-day moving average and $620 level. That’s bulls’ downside mark to watch now, as below that opens the stock up to $500 and the 100-day moving average.
On the upside, though, Tesla was sold after running up to $800. That’s the upside mark to reclaim now, even though Tuesday’s decline from this level likely had more to do with market’s big fall.
Over $800, and technically speaking, $950 resistance is possible.
Top Stock Trades for Tomorrow No. 2: Tilray (TLRY)
Click to Enlarge
I have been critical of Tilray (NASDAQ:TLRY), as shares have been locked in a vicious downtrend for months now. After reporting earnings, that hasn’t changed — with shares falling to new lows on Tuesday.
Below $15, and TLRY remains trapped beneath notable support. If it can reclaim this mark in the near-term, though, it puts the declining 50-day moving average and downtrend resistance (blue line) on the table.
Furthermore, if TLRY clears the 100-day moving average, then a move toward $25 is possible. But given the environment we’re in right now, I wouldn’t be looking for an upside breakout in TLRY any time soon.
Top Stock Trades for Tomorrow No. 3: Gold ETF (GLD)
Click to Enlarge
The SPDR Gold Trust ETF (NYSEARCA:GLD) caught a bid on Tuesday, but is struggling to rally with a significant amount of momentum. That’s surprising, given that gold is usually a “flock to safety” trade, and as the Fed cut interest rates notably on Tuesday.
With the fundamentals in play (lower rates), I wouldn’t be surprised to see GLD challenge the $155 to $156 area sometime this week. If that’s the case, new highs can’t be ruled out. However, below $152.50, and investors have to be prepared for the possibility of a test of the 50-day moving average.
Overall, keep it simple — especially in this environment. Above $152.50 keeps $155-plus on the table. Below, though, puts the 50-day in play.
Top Stock Trades for Tomorrow No. 4: Cronos Group (CRON)
Click to Enlarge
Like Tilray, Cronos Group (NASDAQ:CRON) is breaking to new lows on Tuesday. Below the $6 to $6.50 area, and it’s hard to be bullish on this name from a technical perspective.
Clearing the $7.50 mark, however, changes the narrative. That will mean CRON reclaimed the $6 support area, as well as cleared the 50-day and 100-day moving averages and downtrend resistance.
Collectively, keep an eye on this name if cannabis investing is part of your strategy. A rebound to the $6 to $6.50 area that’s sold into could send CRON back down to its lows. Over it could start to shift momentum back in bulls’ favor.
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.
