It was another win for the bears on Tuesday, as stocks came under more selling pressure to start the week. With that in mind, let’s look at a few top stock trades as push into the holiday-shortened trading week.
Top Stock Trades for Tomorrow No. 1: Gold ETF (GLD)
In what has been a tough session, the SPDR Gold Trust ETF (NYSEARCA:GLD) gave investors a very straightforward setup. That’s exactly why I flagged the name on Twitter (NYSE:TWTR) shortly after the open.
Shares bounced right off the 50-day and 10-week moving averages. It also caught a lift from range support, a level that’s been in play for almost two months now.
However, bulls now need to see the GLD rotate over Friday’s high and the 20-day moving average. That may be difficult with the decent bullish action in the dollar. In any regard, Tuesday’s bounce off support at least gave bulls some cushion in the trade.
Below $170 is not constructive for bulls. Over the 20-day moving average puts downtrend resistance in play near $186 (blue line), followed by this month’s high near $187. Above that puts the Aug. 18 high in play at $189.40.
Top Stock Trades for Tomorrow No. 2: Slack (WORK)
Slack (NYSE:WORK) will report earnings on Tuesday after the close. Shares were very strong until last week’s painful selloff.
The dip significantly reduced the risk for longs heading into the event. It also leaves a clear setup for those looking to trade the name after the report.
On the downside, bulls want to see Slack hold the $27.50 to $28 area, which was support in July and August. However, they need to see the stock hold the 200-day moving average. That’s also where the 78.6% retracement comes into play. Below puts the 61.8% retracement in play at $24.60.
On the upside, let’s see if WORK can clear the 20-day and 50-day moving averages (resistance on Tuesday) and fill last week’s gap near $33 to $33.50. Above puts $35 back in play.
Top Stock Trades for Tomorrow No. 3: Virgin Galactic (SPCE)
Virgin Galactic (NYSE:SPCE) was one of the few stocks showing relative strength on Tuesday, along with some of the airlines (more on those stocks in a minute).
I was bullish on Virgin when it broke out of its falling wedge setup (blue lines), but it did not rally with the rigor that I was hoping for. Then the stock lost the 200-day moving average last week.
Now trying to reclaim it on Tuesday, bulls really need to keep their eyes on two levels: Friday’s low at $14.86 and last week’s high at $18.26.
I realize that’s a wide range, but those levels are what unlocks potential continuation in either direction. Below Friday’s low puts more selling pressure in play. Above last week’s high (and thus the 10-week and 20-week moving averages) unlocks more potential upside.
Top Trades for Tomorrow No. 4: U.S. Global Jets ETF (JETS)
As for the airlines, the U.S. Global Jets ETF (NYSEARCA:JETS) continues to bubble higher. The ETF looks like it’s itching to break out even as the overall market struggles.
$18.31 has been resistance amid this rise, which is the high from August. If we can get a rotation over this mark, it puts $18.74 in play, which is the current high for September. Above that is where we can get some fireworks.
Specifically it could put the 38.2% retracement in play at $19.31, followed by the 200-day moving average near $21. Above that puts the June highs in play at $21.95.
On the downside, a break of the 20-day moving average and uptrend support puts the 50-day moving average in play, which is not that constructive for short-term bulls.
Top Trades for Tomorrow No. 5: Spartan Energy Acquisition (SPAQ)
Spartan Energy Acquisition (NYSE:SPAQ) was on the move as General Motors (NYSE:GM) took a stake in Nikola (NASDAQ:NKLA). However, the $15.50 level and uptrend resistance (blue line) acted as resistance.
Below last week’s high of $14.80 and momentum traders may shy away from this name — particularly with the volatility in the overall market. Above $14.80 keeps $15.50 in play. Above $15.50 puts the 50% retracement on the table near $16.50.
On a deeper dip, see that $13 acts as support, which has been a significant level of support and resistance so far, as well as the 20-day and 50-day moving averages.
On the date of publication, Bret Kenwell held a long position in GLD.