The market started off strong on Monday, but tech couldn’t get going and stocks were eventually pulled lower on the day. That said, let’s look at a few top stock trades for Tuesday.
Top Stock Trades for Tomorrow No. 1: Ark Innovation ETF (ARKK)
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The selling pain in the Ark Innovation ETF (NYSEARCA:ARKK) continues on Monday, with ARKK down about 6% on the day.
On Friday, shares tested near that key $105 level, with the 200-day and 50-week moving averages just below and closer to $100. Unfortunately for the bulls, it seems like a test of one or both of these measures may be in the cards still.
At Friday’s low, shares were down more than 33% and have now declined in 12 of 15 trading sessions.
On a rebound, I want to eventually see ARKK get above its 10-day moving average, removing the short-term selling pressure. Above that, clearing the 100-day moving average and $125 mark will be the next hurdle.
For now though, we need to see ARKK put in a bottom.
Top Stock Trades for Tomorrow No. 2: DoorDash (DASH)
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I never liked DoorDash (NYSE:DASH) from a valuation perspective, as the business seems as though it will never justify the stock’s lofty price. Regardless, the technicals allowed for a strong rally to the upside.
That rally is now coming undone, with shares fading pretty hard to the post-IPO low.
DoorDash hasn’t made new lows yet, but is clinging to the upper-$130s and bulls are hoping it finds its footing soon.
$140 was pretty solid support in December and January, and twice last week gave DASH stock a solid bounce. Testing below it now though and shares are threatening to push lower.
On a rebound, let’s see how DoorDash does with the 61.8% retracement. Above that, and the 10-day moving average puts the 50-day moving average and $177.50 level in play.
Watch for a break of the low (at $135.38) and possible reclaiming of this level. This could set up a short-term trade on the long side if it happens. Otherwise, a close below $135.38 could lead to more selling pressure.
Top Stock Trades for Tomorrow No. 3: Xpeng (XPEV)
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Money is flowing out of special purpose acquisition companies (SPACs), growth stocks and electric vehicles (EVs) and into safer stocks. That’s notable in Xpeng (NYSE:XPEV), which tried to rally on earnings, but couldn’t hold up on Monday.
It closed lower on Monday, making it 16 our of the last 18 sessions closing lower. That’s quite the skid.
The $25 level is now standing out. If it breaks, XPEV stock could head down toward $20, where the stock chopped around plenty before taking off in November.
On the upside, however, let’s see if shares can take out Monday’s post-earnings high. Above that, and the 10-day moving average puts a possible push up toward $37.50 on the table.
Top Stock Trades for Tomorrow No. 4: Altria (MO)
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Unlike XPEV and growth stocks, names like Altria (NYSE:MO) are doing quite well.
Shares have been trending higher for a while now and cleared $44 resistance with little trouble. Now extending off the $44.78 level, our attention drifts higher toward $50. While that’s a ways off, it’s where bulls are hoping to see this one go.
Near $50, Altria has a gap from early 2020 to fill, as well as the 161.8% extension from the recent range.
On the downside, though, a loss of the $44 level could put the 50-day moving average in play.
On the date of publication, Bret Kenwell held a long position in MO.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
