With the market stagnating near these upper levels, but not showing a willingness to pullback in any meaningful way, trade setups are becoming harder to find. That's not necessarily a bad thing, as it gives traders a chance to wait for more opportune trades. Let's see which top stock trades are presenting themselves now.
Top Stock Trades for Tomorrow #1: Tesla
Tesla (NASDAQ: TSLA ) had its Autonomy Investor Day on Monday afternoon. Enthusiasts are excited by what the company has to show off and doubters are eager to pounce on anything that suggests Tesla has no edge.
What does it mean for the stock price though?
Shares were lower by about 3.5% heading into the event and near long-time support. This seemingly sets up the stock up for a bounce, particularly with earnings just around the corner on April 24th. However, some concerns are mounting on the technical front.
For starters, Tesla hasn't been able to break over its downtrend (blue line) on a closing basis for almost three months now. Further, the 200-week moving average - which has been support many times over the past few years - is not giving TSLA the bounce it needs. In fact, TSLA stock has closed below this mark four of the last five weeks, assuming we skip this week's candle.
Needless to say, Tesla is sitting at an important juncture. Below $250 and the situation could go from bad to worse in a hurry. Back over $280+ though and the bulls will have momentum back on their side.
Be aware of two situations, too: either a dump before earnings or a strong rally. Either could end up being a head fake.
Top Stock Trades for Tomorrow #2: Gilead Sciences
Down about 2% on the day and GileadSciences (NASDAQ: GILD ) isn't looking all that good. Keep this one simple.
It's flirting with vital support between $60 and $62 with downtrend resistance (blue line) squeezing it lower. Below $60 and GILD is in no man's land. Above downtrend resistance and GILD will have to contend with $70.
Top Stock Trades for Tomorrow #3: Twitter
Twitter (NYSE: TWTR ) will report earnings on Tuesday before the open, as the stock has been trading in a very tight range for the month. For now, it's holding above the 20-day and 50-day moving averages and just below stiff resistance at $36.
On earnings, look for a close over $36 to signal a potential breakout to higher prices. On a pullback, see that uptrend support holds. If it does, the more quickly it can reclaim the 20-day and 50-day moving averages, the better.
If uptrend support doesn't hold, $30 is in the cards and possibly $28 if that doesn't hold. Let's not get over our skis though. I want to see how TWTR trades after earnings first.
Top Stock Trades for Tomorrow #4: The Trade Desk
We have been flagging The Trade Desk (NASDAQ: TTD ) a lot over the past few trading sessions , either looking for a breakout or a breakdown. As it so happens, a breakout is we're getting and now investors are trying to position themselves in the name.
If you missed the entry trigger over downtrend resistance, chasing may not be worth the risk. Current longs should watch $215 to see if TTD can push through. If it can, a new breakout could be underway and more upside could exist, which gives an opportunity to investors looking to get on board.
Notice that TTD is not overbought according to the RSI, while its momentum via the MACD is just swinging in bulls' favor, (both measures shown via blue circles).
Should we get a pullback to the backside of prior downtrend resistance (black line), it could be a buying opportunity if it holds as support.
Top Stock Trades for Tomorrow #5: Realty Income
We flagged this one about a week ago as the REITs started to come under pressure. I wasn't sure if it was a premature reaction or a savvy move, but I followed my gut and exited my REITs as this action developed.
At the time, we said look for $68 to act as support in Realty Income (NYSE: O ). After strong selling, it was support - for one day. On Monday, O cratered below this mark as the stock is quickly down 9% from its highs less than a month ago. The 20-day moving average is also rolling below the 50-day moving average, which isn't a deal-breaker for bulls, but certainly isn't a great development.
So what now?
Almost 10% off its highs and it's hard to be a seller at this point. But I don't know that it's fallen far enough to buy yet. One strategy? Let it shake out. A rally back up to $68 or to the 20-day/50-day that's met by sellers could be an opportunity on the short side or for bulls to unload some of their holding. If it keeps going lower without a bounce, look for an eventual buying opportunity.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of NASDAQ, Inc.