top stock trades - 5 Top Stock Trades for Tuesday: PG, NFLX, IBM, HAL, APT
Trading

4 Top Stock Trades for Tuesday: SAP, CAT, HAS, MMM

It was as a tough day in the stock market on Monday, with the S&P 500 and Nasdaq both getting rolled. No progress on the stimulus deal, rising novel coronavirus cases and pre-election volatility aren’t helping matters. With all of that in mind, let’s look at a few top stock trades.

Top Stock Trades for Tomorrow No. 1: SAP (SAP)

Even before SAP (NYSE:SAP) reported earnings, shares were looking a bit wobbly. After a powerful move to new highs this summer, shares began trading in a downward channel.

Monday’s gap down was monstrous, a move we don’t usually see out of a name like SAP. In fact, it was the stock’s largest single-day decline in almost thirty years.

However, the stock is declining right down into its 200-week moving average. Will that be enough to stabilize the stock? Perhaps not during such a volatile period, although it has been support in the past.

If it fails, the $95 to $100 area could be next.

On the upside, a move through $125 could put the 50-week moving average back in play up near $135.

Top Stock Trades for Tomorrow No. 2: Caterpillar (CAT)

Caterpillar (NYSE:CAT) stock has been on fire, roasting to new highs in recent trading. With earnings on deck for Tuesday, though, investors are de-risking a bit.

On a bearish reaction to earnings, see that the $145 area acts as support, provided the 50-day moving average gives way first. This would be an excellent buy-the-dip candidate if support holds where it’s supposed to.

There the stock will find the prior 2020 highs from the pre-coronavirus days, as well as a key level from late summer. On the upside, we need to see Caterpillar stock close above $170.

That could put the 161.8% extension in play up near $183. Above opens the door to $200, but let’s not get too bullish here.

Top Stock Trades for Tomorrow No. 3: Hasbro (HAS)

Hasbro (NYSE:HAS) reported earnings on Monday morning, with shares moving lower by about 9.4% on the reaction.

Some may be tempted to buy the stock as it pulls back into the 50-day moving average. By all means, if you love this name, it’s 10% cheaper than it was a day ago, so it may be worthwhile.

From a trading perspective — and as volatility ramps up a bit — I want a better risk/reward. In that case, I’m looking at the $78 area. There it finds the 100-day and 200-day moving averages, with the former having been strong support over the past few months.

Our risk level can be $75, which were the September lows. A clear break below this mark and the long trade is likely off the table. On the upside, let’s see if we can get a push through $90 resistance.

Top Stock Trades for Tomorrow No. 4: 3M Co (MMM)

3M Co (NYSE:MMM) will also report earnings on Tuesday before the open. Like Hasbro, the 100-day moving average has been acting as solid support over the past few months.

A break of this area likely puts the 200-day moving average in play, but if that’s the case, I’d rather a dip down to $150. That level of range support has been more dependable since June — not the 200-day moving average.

We’re open to that development changing, but that’s been the case thus far. A break of $150 is a bad look for MMM.

On a bullish reaction, let’s see if shares can clear this $174 area. That was resistance in September and October. Above would put the pre-coronavirus 2020 highs in play near $177.50, followed by a possible move to the 123.6% extension near $193.

On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.

What's your reaction?

Excited
0
Happy
0
In Love
0
Not Sure
0
Silly
0

You may also like

More in:Trading

Leave a reply

Your email address will not be published. Required fields are marked *