It was not a great session for bulls, as stocks remain under similar pressure as they were late last week. Let’s look at a few top stock trades for Tuesday.
Top Stock Trades for Tomorrow No. 1: Advanced Micro Devices
Early in this year’s decline, Advanced Micro Devices (NASDAQ:AMD) and Nvidia (NASDAQ:NVDA) were trading in-line with each other, declining and bouncing back along similar trajectories.
Now though, the bounces in AMD stock have gotten weaker and it had me wondering how many times this stock can test $100. Well, now we know. It’s failed and breaking lower, below key support and now the 21-week moving average.
As you’ll see in a minute, Nvidia isn’t quite that low yet.
If AMD can reclaim these key marks, look for a push up toward the 10-day moving average, then $110 and $114.
On the downside, more weakness could usher in $92 and we’ll have to see if it can find its footing.
Top Stock Trades for Tomorrow No. 2: Nvidia
As it pertains to Nvidia, this one had the double-whammy impact of selling in the semiconductor space and a downgrade this morning.
Unlike AMD, Nvidia is not yet into its key support level — which is roughly $208 — or its 21-week moving average.
However, if the stock falls into the low-$200s and fails to hold, I believe the 21-week moving average will be on tap. In that case, long-term bulls can likely nibble at the stock there. After all, it was solid support in March 2020.
On the upside, keep an eye on that upside gap near $230. Above that puts the 200-day back in play. It’s pretty unexpected how fast this one fell apart, as it’s been Nvidia’s worst five-day stretch since the already-referenced March 2020 period.
Top Stock Trades for Tomorrow No. 3: Palo Alto Networks
In order to trade well during volatile times, it helps to know where the bull markets are. That has been hard to find in tech, but pockets of cybersecurity have done well. Just look at Palo Alto Networks (NASDAQ:PANW).
It was one of the only stocks I was looking at a long position in today as it gapped down and tested the 21-day moving average and last week’s low.
After a solid bounce, we can now manage the trade from here. If we can clear last week’s high near $631, it opens the door to the longer-term extension targets between $645 and $655.
Otherwise, bulls can operate with a stop-loss just below this week’s low. If we break down, PANW stock could be heading to the VWAP measure near $575.
Top Trades for Tomorrow No. 4: Costco
Costco Wholesale (NASDAQ:COST) has been another relative strength leader lately. Now correcting back to the 10-day moving average, bulls are looking for a buy-the-dip opportunity.
If they get it here, look for a rebound back to $600. Above that puts the current high back in play near $612, followed by a possible and eventual rally into the $630 area.
However, if the 10-day fails as support, bulls should look at the prior breakout high near $571.50 and the rising 21-day moving average as their next opportunity on the long side.
Until the trend fails here, I don’t want to give up on Costco as a leader, but I will not sit around absorbing unnecessary pain.
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