The generals are starting to crack as panic creeps in and even the best names are taking a hit. However, that’s exactly what we need in order to see some sort of upside rally. With that in mind, let’s look at a few top stock trades to get a better grasp of the market.
Top Stock Trades for Tomorrow No. 1: Bitcoin (BTC-USD)
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Bitcoin (BTC-USD) is all over the place and that’s really not helping sentiment when it comes to “risk-on” assets. Remember, everything from Tesla (NASDAQ:TSLA), to Coinbase (NASDAQ:COIN) to the Ark Innovation Fund (NYSEARCA:ARKK) has some connection to Bitcoin.
I can’t emphasize the importance of this level enough. If the $29,000 to $30,000 cannot buoy Bitcoin, we could be looking at a potentially larger rollover. Specifically, I’m watching the 61.8% extension from the all-time high down to the Covid low, at $28,780.
A break of this level should have investors aware that more downside could be on the way. Yes, Bitcoin could break this level, bottom and rally back through it. In that case, we have a reversal trade and if bulls want to take it, that’s their setup.
However, a break of this level and a continued liquidation could put the low-$20,000s in play.
On a rebound, see how the $33,000 level is handled. Above it puts $37,000 to $37,500 on the table.
Top Stock Trades for Tomorrow No. 2: Apple (AAPL)
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Apple (NASDAQ:AAPL) is starting to crack as the generals begin to fall. Unfortunately, this is what we need in order to find a bottom.
The stock dove through $150 support, an area that has held all year long. Cascading through it now, Apple is looking at a potential test of the 21-month moving average. If that doesn’t hold, then the $138 area is on tap. To be frank, I’d rather see this level between the two.
This was the blowoff top high from summer 2020 when Apple split its stock. It was resistance for a year until the stock broke out above in the summer of 2021, then support later in the year. If we see this zone again, my guess is it would be a bounce area.
On the upside, though, reclaiming $150 is pivotal for bulls. If we rally and this is resistance, look out for more selling.
Top Stock Trades for Tomorrow No. 3: Tesla (TSLA)
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Tesla held up for a few days near $780 while clinging to the 21-month moving average. It was doing so this morning, too.
But now that level has given way and fully opens the door for a test of the 2022 low at $700. Look to see how it handles this area. For instance, does it bounce? Does it undercut it and reverse?
If it doesn’t do any of those things and breaks lower, it could eventually put the $550 to $570 area in play — as much as nobody wants to hear that. This was a strong support zone in 2021.
On the upside, however, let’s see if Tesla can reclaim the March low at $756. Above that opens up more upside.
Top Trades for Tomorrow No. 4: Lucid Motors (LCID)
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While we’re talking about electric vehicles (EVs), let’s touch on Lucid Motors (NASDAQ:LCID). This stock is cratering to new lows, which should come as no surprise at the moment.
Looking at the chart, there isn’t much to do unless this trades down to the $10 area.
On the upside, bulls need to see — at a minimum — Lucid stock reclaim the $16.12 low. Better would be a move back above $17.50. Above that opens the door to the declining 10-week moving average and $20. Above that and this could really fly, but obviously Lucid will need a return of bullish momentum to the market.
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.
