Traders are starting to get frustrated with the choppy nature of the market lately, with Tuesday’s back-and-forth action adding to the list. With that in mind, let’s look at a few top stock trades as we approach mid-week.
Top Stock Trades for Tomorrow No. 1: Penn National Gaming (PENN)
Penn National Gaming (NASDAQ:PENN) joins the S&P 500, but the stock isn’t partying just yet.
Instead, it’s clinging to support at the 50-day and 10-week moving averages. Keep an eye on last week’s low at $111.59. The stock traded down into these moving averages last week and gave use a meager bounce.
However, Penn couldn’t reclaim its 10-day and 21-day moving averages. Last week’s low was retested on Monday, but held for the most part. I’m skeptical right now, particularly in this type of tape.
We’ve seen this kind of price action in others, like Nio (NYSE:NIO), before the stock rolled over.
If Penn closes at fresh weekly lows, a push down toward $100 and the 100-day moving average maybe in the cards.
On a move back over this week’s high and the 21-day moving average, and shares may be able to run to the $125 to $130 area. Let’s keep an eye on this one for the rest of this week.
Top Stock Trades for Tomorrow No. 2: C3.ai (AI)
I remember doing some research on C3.ai (NYSE:AI) years ago, when I was doing some digging in the industry. I loved this company and wished it were public at the time, because it had so much promise.
When it finally came public in late 2020, the stock went soaring, almost hitting $200 per share at one point.
Now down considerably from those highs, AI stock is caught in a painful skid. Shares are down more than 61% from the highs and have fallen in six of the past seven sessions. C3.ai is working on its sixth straight weekly decline as well.
Below $90, and the stock will be below its IPO-day low. Once lost, this level began acting as resistance.
The rallies have been incredibly shallow. Until we get some sort of rotation, traders don’t have much place in AI stock. There’s simply no way to measure our downside risk. If we can get some sort of reversal or rotation, then we can look at this one on the long side.
However, back over $90 and the 10-day and 21-day moving averages may eventually have investors looking for a gap-fill up near $115.
Top Stock Trades for Tomorrow No. 3: Small Caps ETF (IWM)
Small caps have been a relative strength leader over the last few quarters, but lately, the group has been quite weak.
The iShares Russell 2000 ETF (NYSEARCA:IWM) bounced hard off the 50-day and 10-week moving averages earlier this month. So hard in fact that after several gap-up sessions, the ETF eventually hit a new all-time high.
Now declining back toward these areas, can the IWM bounce again?
If not, watch for a move below $216.50. Below this level could put the March low back in play, and potentially the 100-day moving average as well.
To see $200 again wouldn’t be the end of the world, but it would be a large unwind from what was once our relative strength leader. For now, though, let’s see if we can get a bounce back over the 21-day moving average.
Top Trades for Tomorrow No. 4: Tilray (TLRY)
Cannabis stocks remain in focus, as does Tilray (NASDAQ:TLRY).
The stock continues to hold the 2020 pre-coronavirus highs near $23, which was a big breakout level in January.
If this level breaks, then we could see a dip down to the March low around $18.23. On the upside, however, we really want to see TLRY reclaim its 10-day, 21-day and 50-day moving averages.
That opens the door back to $30-plus and could reignite the bullish trend.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.