The stock market got off to a lower start on Monday, continuing what the market seemed to have been trying to do on Friday before a late-afternoon rally saved the day. That’s as investors prepare for Federal Reserve Chairman Jerome Powell’s Monetary Policy Report to Congress as well. Let’s look at a few top stock trades to start the week.
Top Stock Trades for Tomorrow No. 1: Pinterest
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This was disappointing action for the bulls. Pinterest (NYSE:PINS) stock initially rallied toward $28 on the day, giving investors hope that the stock was on the verge of a big-time breakout.
Instead, the stock pulled an intraday reversal, giving up all of its gains and actually falling almost 2% at one point.
Short of a late-day recovery, PINS also gave up its 8-day, 20-day and 50-day moving averages. A move below wedge support (blue line) could spell trouble. A rally back above its major moving averages could send the stock up toward wedge resistance and give hope of another breakout.
Top Stock Trades for Tomorrow No. 2: Deutsche Bank
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Shares of Deutsche Bank (NYSE:DB) are down 6% on Monday, after the company announced a massive restructuring plan. The bad news? DB lost the $7.95 to $8 level, which I viewed as quite notable.
On the plus side, the 50-day moving average is acting as support, while uptrend support and the 20-day moving average are just below.
A move below the 20-day and 50-day moving averages puts the June lows back on the table. On a rally, I want to see if DB can reclaim $8 or if this level acts as resistance.
Top Stock Trades for Tomorrow No. 3: Advanced Micro Devices
AMD stock has been trading well lately, rallying higher last week and consolidating its gains. With its move over $32, I want to see AMD maintain above last week’s high. If it does, it puts $32.50 and higher on the table, and if the rally can really take hold, new highs are a possibility.
A move below uptrend support and the 20-day moving average at $30.50 would be very disappointing and force investors to give AMD more time to set up.
Top Stock Trades for Tomorrow No. 4: Twilio
Shares pushed through $142, putting $145 resistance on watch. Above that level and the $151 highs are the table. You’ll notice that TWLO stock has had very healthy price action. It has put in a series of higher lows, while slowly but surely pushing through various resistance marks.
In this case, losing the 20-day moving average would raise my awareness, but I would not be alarmed until TWLO stock closed below the 50-day. The way its MACD reading (blue circle) is turning also has me feeling that a larger move higher could take place.
Top Stock Trades for Tomorrow No. 5: Village Farms
I do not like a stock that has a declining trend running into a static level of support. Generally, that has me watching for a break below support for a shorting opportunity. The opposite is true for bullish situations, like Twilio.
With short-term downtrend resistance (purple line) squeezing it lower, aggressive bears may be tempted to take a short position with a limited risk/reward. More conservative bears may opt to wait for a rally up toward the 50-day moving average and longer term downtrend resistance (blue line) before opening a short position. Or they may opt to wait and see if $11 support breaks.
One thing is clear: Below $11 is trouble for longs, while a rally north of $12.26 is trouble for the bears, as a breakout could trigger.
This one is too volatile for my blood, and I’ll opt to watch from the sidelines. But it’s a good chart to learn from, at least.
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