Labor Day will keep U.S. equity markets closed on Monday, making Tuesday Sept. 8 the first trading day of next week. With that in mind, let’s look at a few top stock trades ahead of a long three-day weekend.
Top Stock Trades for Tuesday No. 1: Tesla (TSLA)
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Source: Chart courtesy of StockCharts.com” data-reactid=”26″>
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Source: Chart courtesy of StockCharts.com
TSLA) is target No. 1 for many traders.” data-reactid=”31″>The volatility over the last few days has been palpable and Tesla (NASDAQ:TSLA) is target No. 1 for many traders.
After a couple of tough days shares are finding buyers — a pullback of which doesn’t look bad at all amid the current run, even though shares fell more than 25% from the peak to the recent low.
InvestorPlace – Stock Market News, Stock Advice & Trading Tips” data-reactid=”33″>InvestorPlace – Stock Market News, Stock Advice & Trading Tips
The 261.8% extension and 20-day moving average are acting as support, while the 10-day moving average is acting as resistance. We need to see which one of these levels gives way and if we can see a continuation in the direction of that break.
On a break of the 20-day moving average and 261.8% extension, let’s see if Tesla takes out Friday’s low at $372.02 and closes below it. If so, it puts the 50-day moving average and breakout level near $330 on the table.
Above the 10-day moving average and three-times range extension, could put $500 back on the table.
Top Stock Trades for Tuesday No. 2: Dow Jones ETF (DIA)
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Source: Chart courtesy of StockCharts.com” data-reactid=”53″>
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Source: Chart courtesy of StockCharts.com
DIA) shows the ETF butting up right into its highs from February. ” data-reactid=”54″>The Dow Jones Industrial Average has not kept pace with the S&P 500 and Nasdaq Composite, although it’s trying to hold up. A look at the SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) shows the ETF butting up right into its highs from February.
While also enduring a quick selloff, it’s finding support at the 20-day moving average.
Keep it simple from here. On a daily-up rotation above Friday’s high puts a run back toward $290 and the current high in play.
Below the 20-day moving average and Friday’s low (at $277.01) puts the 50-day moving average on the table. Below that and — yep, you guessed it — the 200-day moving average is up next.
Top Stock Trades for Tuesday No. 3: Bank of America (BAC)
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Source: Chart courtesy of StockCharts.com” data-reactid=”72″>
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Source: Chart courtesy of StockCharts.com
BAC), which ended Friday up more than 3%.” data-reactid=”73″>Interestingly, the banks have been showing some strength as of late, even in the face of the recent decline. Among investors’ favorite is Bank of America (NYSE:BAC), which ended Friday up more than 3%.
This mark has been resistance both times it has been tested since the novel coronavirus selloff. A move over it puts the June highs in play near $28.80. Above that and $30 is on the table.
On a decline back below $25 creates a problem, as it puts BAC below several key levels and uptrend support (blue line).
Top Trades for Tuesday No. 4: JPMorgan (JPM)
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Source: Chart courtesy of StockCharts.com” data-reactid=”97″>
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Source: Chart courtesy of StockCharts.com
JPM) has a similar setup to BAC, clearing that key $102 area and trying to press higher. Also like BofA, the 50-week moving average has been resistance so far since the selloff. ” data-reactid=”98″>JPMorgan (NYSE:JPM) has a similar setup to BAC, clearing that key $102 area and trying to press higher. Also like BofA, the 50-week moving average has been resistance so far since the selloff.
On a rotation through last month’s high (at $106.43) and the 50-week moving average will again be the target. It also puts the $112 level and the June highs in play at $114.65.
A break of $100 will put the 10-week and 20-week moving averages on the table. Below them and traders will likely wait for a better setup.
Top Trades for Tuesday No. 5: Smith & Wesson (SWBI)
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Source: Chart courtesy of StockCharts.com” data-reactid=”115″>
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Source: Chart courtesy of StockCharts.com
SWBI) shares are struggling on Friday after reporting earnings on Thursday evening.” data-reactid=”116″>Smith & Wesson (NASDAQ:SWBI) shares are struggling on Friday after reporting earnings on Thursday evening.
The stock is now working on its third straight decline and at Friday’s low, was down almost 24% from its 2020 high made on Wednesday.
Now what? If the stock closes below the 50-day moving average, it puts a decline down to the $15.50 to $16 area. There it finds the 61.8% retracement of the 2020 range and recent uptrend support (blue line).
On the upside, I want to see SWBI reclaim the 50-day and 20-day moving averages. Above puts $20 back in play, followed by resistance near $21.50 and then the 2020 high at $22.40.
Future Blue Chips and is on Twitter @BretKenwell.
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