Apparently sick of getting beat up, Nasdaq investors gave the bears a real shellacking on Tuesday. Let’s look at a few top stock trades, starting with the day’s big leader.
Top Stock Trades for Tomorrow No. 1: Tesla (TSLA)
Tesla (NASDAQ:TSLA) took Wall Street by storm on Tuesday, surging 20% at one point on the day.
Those that have read this column over the years may recall my own “rule of 40,” taking a popular measurement for growth stocks and applying it the charts. Simply put, when a leading stock falls by 40% or more, it starts to look much more attractive on the long side.
Of course, this is a rule of thumb and not necessarily gospel. But in this case, it worked quite well, with Tesla falling 40.1% from peak to the recent trough.
Now poking up through the 100-day and 10-day moving averages, bulls need to keep the stock above this area. Back below puts $600 in play. Above $695, though, and perhaps this stock can see $775 — if it can clear the 21-day moving average.
Top Stock Trades for Tomorrow No. 2: Disney (DIS)
Despite all the noise on Wall Street lately, Disney (NYSE:DIS) continues to chug higher. It hit new 52-week highs on Monday and thrashed a bit on Tuesday amid the company’s investor day presentation.
Dipping back below $200 and the 161.8% extension though and traders need to hit the pause button here.
On the downside, I want to see Disney fill the gap near $190.50 and test its 21-day moving average. If it does that, it’s a buy-the-dip candidate (for now). A break of this area, and the 50-day moving average is in play.
On the upside, however, we have a nice two-day high to measure against, at $203.02. And should Disney clear this mark, it could kickstart another rally to the upside.
Top Stock Trades for Tomorrow No. 3: BlackBerry (BB)
BlackBerry (NYSE:BB) has been a volatile holding with all of the r/WallStreetBets hype going on. In any regard, it’s settled down over the last few weeks.
This one is tough.
On the plus side, it filled its gap from January and it’s holding the $9.50 to $9.70 level. Furthermore, it’s above the 100-day moving average and reclaiming the 10-day moving average.
However, it’s still locked in a downtrend and below its 21-day and 50-day moving averages.
For now, I’m watching the latter two moving averages. If the stock can clear these marks, there’s nothing that stops it from testing up into the $12 area. If momentum starts to return above $12, the February high near $15.50 could be in play.
On the downside, though, a break of last week’s low and the 100-day moving average puts the 200-day in play.
Top Trades for Tomorrow No. 4: MongoDB (MDB)
Shares of MongoDB (NASDAQ:MDB) are giving us a solid rebound on Tuesday, up about 8.7% but still posting an inside day (that’s how intense Monday was) ahead of earnings.
Before Tuesday’s rally, MongoDB was down 27.3% after five straight down days. From the February highs, the losses are even worse, at 33%. So, what now?
From here, we either need a deeper dip or a big bounce.
Specifically, I wouldn’t hate seeing MDB stock open around $270 on Wednesday. That was a key breakout level and where the 200-day moving average currently sits. Opening here and reclaiming this week’s current low would be a big win for the bulls.
On the upside, however, let’s see if shares can reclaim the 100-day moving average. Above puts the 10-day moving average in play, followed by former uptrend support (blue line), currently near $350.
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.