Stocks rebounded nicely on Monday, although they struggled with a key area late in the day. With that in mind, let’s look at a few top stock trades, including an earnings preview and the S&P 500.
Top Stock Trades for Tomorrow No. 1: Advanced Micro Devices (AMD)
Advanced Micro Devices (NASDAQ:AMD) was facing its fourth big loss in five trading sessions. But after tumbling lower at the open, the stock found support.
This time, the 10-week moving average stepped in and AMD stock bottomed within the opening hour and rotated higher. It gave bulls a great buying opportunity and the quick bounce reassured them of that.
Now we have to see if shares can get back above Friday’s low, at $140.72. So far, the answer is no.
However, if it can do that, the declining 10-day moving average is on the table, then $150. On the downside, keep an eye on Monday’s low. A break of that likely puts the daily VWAP measure and the 50-day moving average on watch.
Top Stock Trades for Tomorrow No. 2: Ark Innovation ETF (ARKK)
I know I just talked about the Ark Innovation ETF (NYSEARCA:ARKK) last week, but I thought it needed another mention today.
Shares opened near Friday’s low but quickly traded below it as growth stocks were again under pressure. The exchange-traded fund (ETF) bottomed near $89, then reclaimed Friday’s low at $91.66.
This actually set up a pretty sweet bullish reversal trade.
From here, we need to see ARKK stock remain above $89. That will keep $97.22 in play, followed by $100-plus.
Did Ark just bottom? It’s probably too early to say, but today’s action is certainly encouraging. It helps that it closed near the high of the day.
Top Stock Trades for Tomorrow No. 3: MongoDB (MDB)
Shares of MongoDB (NASDAQ:MDB) were under pressure today ahead of its earnings report after the close. Does that mean bad news is on the way?
Not necessarily. But it does show how investors are fearful of holding growth stocks right now, particularly after the way we’ve seen a few other post-earnings reactions go.
Shares are dropping below the $435 level, which has been support over the last few months. But ahead of earnings, we have to discount some of this move.
On the upside, a successful move starts with a push back over $450. That opens the door to a whole host of moving averages, including the 10-day and the 10-week. Above these measures and the 50-day moving average is on the table. In all, the $500 area should be a tough hurdle for MDB stock if it gets there.
On the downside, however, there is a gap-fill level near $406, followed by the 200-day and 50-week moving averages just below $400. A break of these measures could put the weekly VWAP level on the table.
Top Trades for Tomorrow No. 4: S&P 500 ETF (SPY)
Last but not least, let’s look at the S&P 500 via the most commonly used ETF: The SPDR S&P 500 Trust ETF (NYSEARCA:SPY).
This morning I wrote:
“On the upside, they’d love to see a move back over $460.30. That’s Friday’s high, but it would also put the stock back above the 10-day moving average, which has been active resistance.”
For a little while, the SPY did clear this mark and the 10-day moving average. But just as it’s continued to do, this moving average remains active resistance.
While it’s positive to see the SPY above the 50-day moving average and the $453 breakout level, we need to clear the 10-day to have a sustained push higher. If that happens, it opens up the 21-day moving average and last week’s high near $456.50.
On the downside, though, a break of $453 has to have investors on guard for a dip to last week’s low. Losing that mark at $448.92 could really put bulls in some pain, especially if it closes below this level.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.