It’s getting interesting out there. Growth stocks have been getting hammered, and were hit hard again on Wednesday. While tech was wounded, breadth in both the Nasdaq– and New York Stock Exchange-traded securities wasn’t all that bad. With all of that in mind, let’s take a broad look for the first of our top stock trades.
Top Stock Trades for Tomorrow No. 1: Invesco QQQ ETF (QQQ)
We’re not getting that super robust panic action in the market. It may never come and doesn’t need to come necessarily, but it’s worth pointing out its absence thus far. For instance, last week was worse in regards to the VIX and downside breadth. Wednesday was more muted vs. last week.
That said, the Invesco QQQ ETF (NASDAQ:QQQ) is handling the action the worst. Growth stocks aren’t propping up the ETF, while FAANG remains unimpressive.
But after all of this, the QQQ is down just 8.6% from its highs. Down 10% to 11% gets us to the 100-day moving average and down toward $300. There should be decent support in this zone — at least for a bounce.
I’m not being an alarmist but down 8.6% isn’t much pain. We could be down 15% to 16% just to get the QQQ to the 200-day moving average.
That’s not a guarantee the stock goes there, but it’s just a reality that it could and the carnage we’re seeing now we’ll be exacerbated as a result. Stay on your toes, look for reactionary lows followed by rotation. No one knows how or when the selling ends.
Top Stock Trades for Tomorrow No. 2: FuboTV (FUBO)
FuboTV (NYSE:FUBO) made a great pre-earnings move over the last couple of days, rallying over $40 and a few key moving averages.
That’s not working out on Wednesday though, down 18.5% and near the session lows.
I want to see this $33 area continue to act as support. It did so all of last week amid strong selling pressure. If it fails, the 100-day moving average is on the table, followed by the $26 range that buoyed the stock at the start of the year.
On the upside, FUBO stock has to get back above $40 to become a momentum play. Until then, bulls may be stuck playing support for the time being.
Top Stock Trades for Tomorrow No. 3: Clover Health (CLOV)
Clover Health (NASDAQ:CLOV) has been attracting a lot of attention lately, and I have to be honest, this name has been getting creamed.
If bulls are looking for a high-risk dip buy, maybe they can stalk this one if they’re experienced.
The stock is showing a little bit of divergence on the Williams %R (at the bottom of the chart), but we need more than that to take a stab. A falling wedge look is there, but CLOV stock needs to break out of it on the upside, not the downside.
If it can get going, a rebound toward the $9.75 to $10 area is possible. For now, the 10-day moving average is resistance until proven otherwise.
Furthermore, $8 is the low to measure against for now. A daily close below that and CLOV may keep falling. This is a high-risk stock and as a result, not for everyone.
Top Trades for Tomorrow No. 4: AT&T (T)
AT&T (NYSE:T) was one of the few names popping higher on the day, up about 2%. I want you guys to see something with this one, though.
Notice on the chart, how $28.30 to $28.50 was range support for a couple of months.
Then last week it closed violently below it. That was a flush out. Or at least it was in the short term.
After that we got back-to-back inside days, but the tricky part was that prior support was now resistance. This was a bearish-looking setup in more ways than one. But this is a lesson in flexibility: Listen to what the charts are trying to tell you — even if they are deceitful at first.
For now, AT&T looks to be back in the range. Look to see if it can get to the 200-day moving average, then $29.75. Below Wednesday’s low, and T could be in trouble.
On the date of publication, Bret Kenwell held a long position in T.