After an ugly open for tech stocks and growth stocks, many stocks in the group reversed to the upside. Is the low in? That will only be clear in hindsight. For now, though, let’s look at a few of these stocks for our top stock trades.
Top Stock Trades for Tomorrow No. 1: Palantir (PLTR)
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Palantir (NYSE:PLTR) has been annihilated from the highs. From the highs to Monday’s close, shares were down 52%. However, PLTR began the day with a massive gap down.
That came after the company reported earnings. Despite a solid report, the market was in no mood to hear it from the bulls, instead choosing to sell without discretion. At today’s low, shares were down 3.2% from Monday’s close, while those losses swelled to 11.3% if taken at this morning’s pre-market lows.
Up 9.4% at the end of Tuesday, though, and the close looks much different than the open. In fact, Palantir is giving us a bullish engulfing candle, as today’s range completely takes Monday’s range. It even filled the gap.
But it’s not out of the woods.
On the plus side, bulls now have a level to measure against on the downside, albeit one that’s somewhat far away. On the upside, it needs to reclaim the $21 level and its 10-day moving average. If it can do that, perhaps we can see bulls garner some more momentum.
A close below Tuesday’s low puts the $15 to $16 are in play.
Top Stock Trades for Tomorrow No. 2: Fastly (FSLY)
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Over the last few days, I’ve suggested that investors start taking a closer look at growth stocks, and that I feel we are closer to the bottom than the top. However, that doesn’t mean it’s time to borrow a line of credit on the house and go all-in here.
Fastly (NYSE:FSLY) is a great example.
After a post-earnings washout, it’s possible we’ve seen the stock’s capitulation. Look at the way it’s been hammering off this $40 level, trying to turn higher.
On the upside, I’m looking for a move to $50 and the 10-day moving average. Above puts the 10-week and 21-day moving averages in play, which are currently north of $60.
Obviously a close below this week’s low creates a problem for longs, putting sub-$40 levels in play.
Top Stock Trades for Tomorrow No. 3: 3D Systems (DDD)
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It’s been a while since we’ve talked about 3D Systems (NYSE:DDD). After a meteoric rise at the start of the year, DDD stock has been under tremendous pressure as growth stocks have been pulverized.
On the plus side with this stock, shares simply (yet painfully) only traded down to the 200-day moving average.
Also unlike most growth stocks, today’s rally sent DDD stock back up above the 10-day and 21-day moving averages. Shares also reclaimed the March low at $22. From here, I would love to see DDD stock hold above these marks.
On the upside, keep an eye on the 10-week and 50-day moving averages. Above could open the door to $30-plus.
Top Trades for Tomorrow No. 4: Occidental Petroleum (OXY)
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Let’s shift away from high-growth tech stocks for our last candidate as we focus on Occidental Petroleum (NYSE:OXY).
Occidental has been on a long, but slow recovery from its 2020 lows. We never saw that robust upside momentum like many other stocks experienced from the bottom.
Shares did trade well into the March highs, but lately, OXY stock has been backing off. The stock is now teetering on the $24.50 level, which was the high from June. Notably, this was also the breakout level from February.
If this level holds, let’s see if we can get a move back over the May high, at $28.13. Above that, and the 2021 highs could be on the table near $32. Incidentally, that’s also where the 61.8% retracement comes into play from the first quarter of 2020 range.
However, if it fails as support, it could put the April low in play at $22.44. Below that could put $20 and the 200-day moving average in play.
On the date of publication, Bret Kenwell held a long position in FSLY.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
