5 Top Stock Trades for Tuesday Morning
Monday was an interesting trading day. While the broader indices didn’t show much action, there were tons of moves going on below the surface. Let’s take a look at some of them in our top stock trades for Tuesday.
Top Stock Trades for Tomorrow No. 1: Fitbit (FIT)
Not too long ago, we took a look at Fitbit Inc (NYSE:FIT). With FIT near resistance and overbought in the short-term, we said, “a pullback and some consolidation above the 200-day moving average would be best for bulls or a push through $6.50 followed by some consolidation.”
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Well, FIT stock was able to consolidate at $6.50 and now it’s exploding up through $7, up almost 20% to $7.50 on Monday thanks to comments from Citron Research’s Andrew Left.
While it did consolidate near the level we were watching, I won’t pretend like I caught this move. Now above key $7 resistance, it would be nice to see FIT consolidate above this level before trying to go higher. Particularly with an RSI north of 80 (blue circle).
Top Stock Trades for Tomorrow No. 2: Lam Research (LRCX)
Over the last few days, we’ve seen Lam Research Corporation (NASDAQ:LRCX) go from $200 down to $185.
LRCX stock is entering a do-or-die spot for longs. But that’s also good news for prospective bulls, as it gives them a good risk/reward setup.
LRCX needs this $180 to $185 level to hold as support. Should it fail, it opens up the door for shorts to run it down to $175 and then gun for the 2018 lows. I happen to think LRCX has a very solid business, so I wouldn’t count on a drop down $160.
But remember to go with the grain, not against it when trading.
Top Stock Trades for Tomorrow No. 3: Roku (ROKU)
Last week we took a closer look at the fundamentals for Roku Inc (NASDAQ:ROKU) and flagged a potential breakout in the name. Little did we know it would come first thing this week.
After bursting through this $39.50 to $40 level of resistance, ROKU stock can officially say the trend is its friend. Look for $40 to now hold as support should the shares pullback in the short-term.
As for a target, I’m looking for ROKU to challenge the $45 area. Eventually filling its gap from February would put ROKU back over $50.
Top Stock Trades for Tomorrow No. 4: BlackBerry (BB)
One of my favorite things is a KISS — Keep It Simple, Stupid — setup and a solid risk/reward. With BlackBerry Ltd (NYSE:BB), we get both.
The setup is simple: BB stock needs to stay above its previous downtrend resistance line. That means it needs to stay above this $12 area, with the 100-day moving average serving as a solid proxy just below.
The risk/reward then is also simple: Below the mark mentioned above and we bail. Above and we can see if BB will re-challenge its recent highs near $12.55 and hopefully advance past them on its way to $13. There’s great risk/reward with this incredibly simple setup.
Top Stock Trades for Tomorrow No. 5: Nvidia (NVDA)
Nvidia Corporation (NASDAQ:NVDA) is one we haven’t talked about in a while. Shares hit new 52-week highs last week, but are stalling near $265.
So far, its prior high near $260 is holding up as support, but that doesn’t give bulls much wiggle room to be wrong. I’d rather use a smaller trade size and a wider trading range for NVDA. A 2% loss wouldn’t be hard to achieve, especially if stocks come under pressure.
For NVDA, it’s still in that ascending range, and to feel confident, I really just want to see it stay above the $250 to $255 area (blue rectangle). But truly so long as it’s above $235, bulls don’t have a lot to worry about.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, he was long long BB, NVDA and ROKU.
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