After a big day for the bulls on Monday, it was a pretty quiet day in the stock market on Tuesday. With that in mind, let’s look at a few top stock trades as we head into mid-week.
Top Stock Trades for Tomorrow No. 1: Facebook (FB)
Digital ads are dead? Not according to Facebook (NASDAQ:FB) stock. Shares are surging to pre-coronavirus highs and even taking out the February highs.
The stock is now just a hair off major resistance at $222.50. Facebook momentarily pushed through this level in January, only to gap-down significantly and then put in a lower high in February.
Because of the difficulty FB stock had with this level, I wouldn’t be surprised if it again acts as resistance. However, a breakout over it could trigger a notable rally higher.
On a dip, see if shares find support at prior post-earnings resistance near $215. Below puts uptrend support in play (blue line), followed by the 20-day moving average and $200.
Top Stock Trades for Tomorrow No. 2: Shopify (SHOP)
One stock hotter than Facebook? Shopify (NYSE:SHOP). Shares are up more than 100% from last month’s lows, and bulls are looking for even more upside.
The stock very nearly broke its short-term uptrend on Tuesday (blue line). However, it recovered it with a solid rally on the day. Now bulls will look to take SHOP up through $775 resistance. If they can, it may trigger a breakout to $800-plus.
Shopify stock is a great trading stock, but investors are likely looking for a deeper dip for a long-term buy. That’s responsible at this stage of the game.
If SHOP does break below trend support, though, see if the 20-day moving average acts as support. Below puts the $650 to $670 area in play.
Top Stock Trades for Tomorrow No. 3: Walmart (WMT)
This is a very ugly candle from Walmart (NYSE:WMT). The stock was trading notably higher in pre-market trading after better-than-expected earnings. However, today’s reversal is not a good look.
It’s very close to a bearish engulfing candle, but not quite there yet without taking out Monday’s low. Below $126 will put the 20-day moving average and uptrend support (blue line) in play. If that fails as support, the 50-day moving average is up next.
For such a solid quarter, I would have expected a better reaction out of WMT, which has been trading very well lately. Despite the poor reaction, I am more prone to buy the dip in this one, provided support holds.
On the upside, however, look for a retest of $132.
Top Stock Trades for Tomorrow No. 4: UnitedHealth Group (UNH)
UnitedHealth Group (NYSE:UNH) continues to flirt with a breakout over the $297.50 to $300 area. So far, though, it has kept the stock pinned down over the past month.
A move over this zone puts the February high near $305 in play, then a move higher — potentially to $320 or so — could be in the cards.
On the downside, a move below the 20-day moving average would be discouraging. However, below $275 range support and the $261 to $265 area is in the cards, where UNH will find its 50-day and 200-day moving averages.