After a bullish climb and a few shortened trading weeks, nothing wakes you up like a quick punch to the nose on a 100-handle dip in the S&P 500 within the first few hours of the new trading year. That said, let’s get after some top stock trades amid the renewed volatility.
Top Stock Trades for Tomorrow No. 1: Tesla (TSLA)
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With a market capitalization right around $700 billion, all eyes remain on Tesla (NASDAQ:TSLA). To be clear, I’m not a Tesla bear necessarily. However, I’m not a “Tesla to infinity and beyond” believer and I do think the valuation is ridiculous at this point.
In any regard, my opinion hasn’t stopped the stock from surging higher. Shocking, I know.
So, what now? Today’s strength in the face of market weakness is impressive. If shares can push through Monday’s high, then look for a possible test of the 261.8% extension up near $782.
On the downside, though, losing $695 could be a concern. While there’s plenty of moving average support nearby, these levels need to hold to keep the short-term trends intact. Below $650 and things could get bumpy for Tesla — and fast.
Top Stock Trades for Tomorrow No. 2: FuboTV (FUBO)
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I know we looked at FuboTV (NYSE:FUBO) recently, but the action just demands that we take another look.
In the last week of December, I wrote that Fubo needed to hold its two-day low near $36, otherwise $30 would be in play, followed by the 50-day moving average.
Traders didn’t have to wait long to see this one play out, with shares closing at $28 just two sessions later, and breaking the 50-day moving average on Monday.
Is it worth a shot now? For long-term swing traders, it may be. We have a reactionary low to measure against, but even more aggressive traders might consider adding on further downside.
We have a stock that was at $62 just a few days ago and is sub-$25 now. The seven-day slide wiped out more than 62% of the stock’s value and at the very least, it could be setting up for a bounce. On the upside, let’s see how shares handle $30, then we’ll see if it can fill that gap up toward $32.
On the downside, however, a break of Monday’s low could put $22.50 in play, followed by the $18 to $20 area and the 100-day moving average. This stock is for aggressive traders only and proper position sizing is an absolute must.
Top Stock Trades for Tomorrow No. 3: Silver ETF (SLV)
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Last week we looked at gold and now it’s time to examine is sibling, the iShares Silver Trust ETF (NYSEARCA:SLV).
The stock did a great job of pushing back through the $26.75 level, which was resistance in late December. Previously, this mark — which is also the 61.8% retracement — was support in August and September.
We have a cut-and-dry outline here. If the SLV doesn’t hold $24.32, then the 50-day and 100-day moving averages are in play.
If shares can continue higher, $26.75 to $27.50 is the next upside zone.
Top Trades for Tomorrow No. 4: Advanced Micro Devices (AMD)
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Patience or a warning shot? It’s not really clear with Advanced Micro Devices (NASDAQ:AMD). The semiconductor stocks wanted to rally today, but the weakness in the overall market sapped any strength here.
Still, if EVs could do it, why couldn’t semi stocks?
If we get a daily close below last week’s low, look for a test of the 50-day and 100-day moving averages. If the selling is aggressive, it could even put $80 on the table.
On the upside, a daily close above the 10-day moving average puts Monday’s high near $96 on the table, followed by the all-time highs near $98, then $100. It mostly boils down to the severity of the market’s dip. Essentially, was Monday’s action the shake-out or is a larger disruption on the way in the short term?
We don’t know. That’s why we use levels.
On the date of publication, Bret Kenwell held a long position in FUBO.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
