Stocks crept higher on Monday after a bumpy Friday session and ahead of what’s set to be a very busy earnings week. With that in mind, let’s look at a few top stock trades for Tuesday.
Top Stock Trades for Tomorrow No. 1: McDonald’s (MCD)
With earnings on deck, let’s look at a few earnings previews to start the week. McDonald’s (NYSE:MCD) will report before the open on Tuesday.
The stock has been rather resilient over the last month, running from $178 to $202. Now, though, it faces a test. If shares can clear the June high at $202.73, it could create a larger monthly-up rotation.
Of course, that’s if McDonald’s is able to do so by the end of this week while it is still July. If it doesn’t, it creates the potential for an inside-and-up month in August. On a move higher, look to see if the 2020 high near $215 is reached.
On a bearish reaction, however, see that support holds in the $190 area. There MCD finds the 20-day, 50-day and 200-day moving averages, as well as uptrend support (blue line). Below puts the July low in play at $182.62.
Top Stock Trades for Tomorrow No. 2: DraftKings (DKNG)
With the MLB only days into the regular season, the coronavirus has already forced an emergency meeting. That’s got Disney (NYSE:DIS), DraftKings (NASDAQ:DKNG) and others under pressure — and understandably so.
$38 acted as stout resistance for DraftKings, a formidable defensive line that perhaps only Barry Sanders could have wiggled through. Not DKNG stock, though, shares of which ended the day down nearly 7%.
Shares are holding the 20-day and 10-week moving averages as support. While they may hold, investors may be better off waiting for more clarity. Ideally for bulls, shares will reclaim the 50-day and 10-day moving averages before retesting $38 resistance.
Above $38, and downtrend resistance (blue line) is in play followed by a potential test of $44. Those who go long can use a stop-loss near Monday’s low as a way to limit the risk. Others may prefer to wait and see, it just depends on one’s risk tolerance. Below this week’s low puts the May and July low in play near $27.50.
Top Stock Trades for Tomorrow No. 3: Pfizer (PFE)
Like McDonald’s, Pfizer (NYSE:PFE) will report on Tuesday before the open. I highlighted this stock last week, as shares were running right into $38.50 resistance.
While the stock gapped over that mark in the following session, it fell throughout the day, letting the breakout slip away and pulling back in each of the next two sessions. And for bulls, that’s likely the ideal scenario.
Now, we have earnings. On a bullish reaction, I’d love to see PFE close above $38.50 resistance in a meaningful way. Above puts last week’s high in play, as well as the January highs near $39.50.
On a dip, though, let’s see how shares handle a gap-fill towards $37. Below could send the stock toward moving-average support near $35.50.
Top Stock Trades for Tomorrow No. 4: Hasbro (HAS)
Hasbro (NASDAQ:HAS) reported earnings on Monday morning, and shares are getting smacked as a result.
The stock is breaking below the 20-day and 50-day moving averages, as well as uptrend support (blue line). Below these marks now, it puts the June low in play at $69.33, followed by the May low near $60.
However, if the stock can find its footing and reclaim these two key moving averages, look for a possible retest of $80 resistance.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret did not hold a position in any of the aforementioned securities.