5 Top Stock Trades for Tuesday — New Lows for GE, Now What?
After starting off higher on the day, U.S. indices had trouble maintaining altitude throughout the trading session. Worries over Turkey combined with a strong rally over the past six weeks is likely acting as a catalyst for profit taking. Let’s see if there are any opportunities for our top stock trades.
Top Stock Trades for Tomorrow #1: Advanced Micro (AMD)
Shares of Advanced Micro Devices (NASDAQ:AMD) aren’t showing much weakness, pressing higher toward $20 per share despite the choppiness of Monday’s session.
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The trade then is simple. A breakout and close over $20 should be bought, while investors should avoid AMD if uptrend support fails.
This is a great company that we nailed the bottom in. Unfortunately, we were too conservative and are now out of the name. Such is life though, and just like in life, we’ll likely have another opportunity.
Top Stock Trades for Tomorrow #2: Square (SQ)
Square (NYSE:SQ) has a very similar setup to AMD. Right now, tech is showing some solid strength amid the current pullback. What’s the takeaway? These names and this group are holding up, meaning when the tides turn and the overall markets rally, these names will be likely be big winners.
SQ is clearly in a strong uptrend, with resistance sitting around $72.50. Should it push through, $75 should quickly become a reality.
Top Stock Trades for Tomorrow #3: Roku (ROKU)
Roku (NASDAQ:ROKU) reported an amazing quarter, and its stock went from $47 to $57 in one day as a result. After hitting new highs in the following session, shares are retreating.
This has become a buy-on-dips type of stock. After hitting a low in the $54s Monday, the unlikely possibility of ROKU retesting breakout resistance near $52 may actually be in the cards.
If it does, that’s a sure-fire buy. That or a retest of its old uptrend support, whichever comes first.
Top Stock Trades for Tomorrow #4: Overstock
Earnings ignited a rally in Overstock (NASDAQ:OSTK), pushing shares well over $40 resistance and up to $48. It promptly hit its 200-day moving average and has been cascading lower ever since.
Shares now sit below $36, at the conflux of the 50-day and 100-day moving averages. That may bode well for support, but I’ve gotten stung one too many times touching this name.
I would rather own OSTK over $40. Below that and I’m not a buyer unless shares are at $30 or the backside of its previous downtrend line. Sorry bulls, OSTK is just too volatile to play games with when the risk/reward is out of favor.
Top Stock Trades for Tomorrow #5: General Electric (GE)
Why aren’t we surprised that General Electric (NYSE:GE) is making new lows Monday? InvestorPlace readers dodged a bullet, as they were warned ahead of time to take a pass on GE this summer. That warning extends back to January, too.
So what now?
This thing is looking ugly. Quick traders can scalp a few dimes out of GE, but for swing traders to get involved, General Electric needs to show some life.
At the very least, bulls need to wait until GE is back above its prior lows before going long. However, I wouldn’t be interested in GE on the long side until it’s at least above downtrend resistance, and more preferably above its 50-day and 100-day as well.
Shares may yield 3.85%, but remember, it paid a similar dividend before it was slashed in half last fall. Could another cut be looming?
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities.
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