More volatility entered the market on Monday, although U.S. equities did a good job rallying off the open. That said, they still closed lower on the day. With that in mind, here’s a look a few top stock trades for Tuesday.
Top Stock Trades for Tomorrow No. 1: VanEck Russia ETF (RSX)
Click to Enlarge
Given the news flow, it’s no surprise that the VanEck Russia ETF (BATS:RSX) is getting decimated again on the day. Practically every nation is laying blame on Russia, and no one seems to be siding with them.
Sanctions are raining down on the country, its economy, banking system, oligarchs and more. The stocks are collapsing, as is the Ruble. Other companies with large stakes in Russia’s energy companies are backing out as well.
Last week, we said investors should expect the RSX ETF to break $12.50, even though it was bouncing nicely from last Thursday’s low and climbed as high as $17.49 on Friday.
Now, the Financial Crisis low near $10.50 is within reach. That highlights just how bad the situation is right now as it pertains to Russian equities. Some would expect this level to be support.
On the upside, though, see how the $13.14 area is handled — the low from the Covid selloff.
Top Stock Trades for Tomorrow No. 2: Lucid Motors (LCID)
Click to Enlarge
Lucid Motors (NASDAQ:LCID) will report earnings after the close. Like most growth and electric vehicle (EV) stocks, shares have been under pressure lately.
The stock has put together three strong days in a row but is rallying right into the $28 to $30 area, which has been a battleground zone. If we get a bullish reaction to earnings, we must see how the $30 level is handled.
There we find the 200-day moving average and downtrend resistance (blue line). Just above that is the February high at $30.85. When Lucid begins trading tomorrow, it will be March, so a lift above this price could put a monthly-up rotation in play.
On the downside, however, keep an eye on today’s low. Not that a daily-down rotation below $26.17 is that big of a deal on its own. However, it gives us a bearish post-earnings reaction and a move below the 10-day and 21-day moving averages.
In that scenario, it could open the door back up to the $22 area again.
Top Stock Trades for Tomorrow No. 3: Taiwan Semiconductor (TSM)
Click to Enlarge
The semiconductor space has been mixed and nowhere is that more clear than with Taiwan Semiconductor (NYSE:TSM). Shares bounced really nicely from the 161.8% downside extension near $105 last week.
That came into play at the “C-leg” low, as part of the “ABC” correction. The initial bounce sent shares back above $110 and more importantly, back above $107.50 support. This level has been incredibly significant for more than a year now.
As TSM stock pushes lower once again, we need to keep an eye on last week’s low near $104.40. A break of that mark that’s not reclaimed puts $100 or lower in play.
On the upside, though, it’s pretty simple. TSM stock needs to reclaim $107.50, then focus on Friday’s high at $113. Above that puts $114.19 in play, then the 10-day moving average and the gap-fill at $115.76.
Top Trades for Tomorrow No. 4: Occidental Petroleum (OCX)
Click to Enlarge
Last but not least, we have a powerful rally in Occidental Petroleum (NYSE:OXY). I have liked Occidental in the last and this move reiterates why, as energy stocks continue to trade incredibly well.
Now we need to see if OXY stock can clear $43.16. If it can do that, it puts the 161.8% extension in play up at $46.62.
However, if it can’t rotate higher, bulls will want to see the $40 area hold as support on a pullback. That’s where the 10-day and 21-day moving averages come into play, as well as the daily VWAP measure.
Below those measures and the $37.50 area is in play.
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.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
