Bulls who had been lulled to sleep over the past couple of weeks were jolted awake with Monday’s morning volatility. With all that volatility, it may be hard to know what to do, let alone what the top stock trades are.
Let’s look at a few top stock trades for Tuesday.
Top Stock Trades for Tomorrow No. 1: Russell 2000 ETF (IWM)
Over the last one-month, three-month and six-month periods, the iShares Russell 2000 ETF (NYSEARCA:IWM) has outperformed its major-index peers.
While the market swooned on Monday, the IWM’s dip to the 10-day moving average was immediately greeted by bulls. Buyers bid it up off this level, quickly filling the gap.
I now want to see if the IWM can clear the current high at $197.83, then clear the 138.2% extension up at $199.16. If it can clear $200, perhaps investors will soon turn their target to the 161.8% extension near $216.83.
Below Monday’s low will put the 20-day moving average in play followed by a potential test of the $185 level.
Top Stock Trades for Tomorrow No. 2: Invesco QQQ ETF (QQQ)
The Invesco QQQ ETF (NASDAQ:QQQ) also opened lower and came under selling pressure in early Monday trading. By later this afternoon, the QQQ had erased most of its losses.
Let’s see if the stock can continue higher and take out the two-times range extension and all-time high near $312. Above that, and the long-term target near $354 could be in play, which is the 261.8% extension.
To get there though, big tech will need to wake up and start to make its way back to the highs.
On the downside, losing Monday’s low and $300 would be a bearish development, putting the 50-day moving average (and perhaps lower) in play.
Top Stock Trades for Tomorrow No. 3: Alteryx (AYX)
Speaking of sleeping stocks, is Alteryx (NYSE:AYX) finally waking up?
The stock is working on its sixth rally in seven trading sessions and is trying to give investors even more. If it can close above Friday’s high at $129.47, it will give bulls: a bullish engulfing candle, a daily-up rotation, a weekly-up rotation and a close over the 50-day and 200-day moving averages.
If bulls get that, look for a possible post-earnings gap-fill to the $137 to $140 area. Above that could put the pre-earnings high in play near $155, followed by an eventual fill of that massive gap up near $168.
While a failure near this area would be disappointing, it wouldn’t be completely surprising. A loss of $120 and uptrend support (blue line) would definitely deal a blow to the bullish case, though.
Top Trades for Tomorrow No. 4: CarMax (KMX)
CarMax (NYSE:KMX) stock is set to report earnings on Tuesday before the open.
On Monday, shares had an excellent reaction off the 10-day moving average before clearing Friday’s high and last week’s high. With the November high within spitting distance at $101.16, bulls will be looking for weekly-up and monthly-up rotations.
If they get it, $109 resistance is in play, followed by the 161.8% extension near $124.50. That’s measured from the October low to the August high.
On the downside, look for a break of $97.50, which would put $92.50 to $94 on the table.
Top Trades for Tomorrow No. 5: FuboTV (FUBO)
FuboTV (NASDAQ:FUBO) is exploding higher on Monday, up almost 30%. Shares are running into $50 and starting to show signs of exhaustion. The stock is certainly overbought, although momentum buyers can maintain that state for quite some time when determined.
Last week’s tag of the 10-week moving average was the ideal buy zone. Since then, the stock has almost doubled. The move is a bit too rich for me, with the exception of short-term dips on smaller timeframes.
Otherwise, I would consider waiting for a dip to the 10-day moving average, after seeing how Fubo handles $50. Above that could put the 361.8% extension in play near $58, followed by the $67.50 area.
Keep in mind, this is a wild and fast mover.
On the date of publication, Bret Kenwell held a long position in QQQ and AYX.