Last week, the best performance from the S&P 500 was a near-1% decline. Ouch. That really says something about the climate we’re in now, and Monday didn’t make matters much better. This type of downward momentum is not common. But in the meantime, let’s look at a few top stock trades.
Top Stock Trades for Tomorrow No. 1: Bitcoin (BTC-USD)
It’s no surprise really that Bitcoin (CCC:BTC-USD) has been getting clobbered. It’s a “risk-off” environment right now and Bitcoin is most definitely considered to be in the “risk” category by most investors.
For what it’s worth, other cryptocurrencies are down big too, so it’s not as if the pain is exclusively in Bitcoin.
Last week, Bitcoin broke below the key $40,000 area. That was the December low and the flash crash low and had been serving as support. However, the trend of lower highs was clear and the fact that Bitcoin broke down is not too surprising.
Now finding its footing around the 21-month moving average, it will be key to see if Bitcoin can hold its recent low. If it can, let’s see how it handles a bounce back to the declining 10-day moving average. Above it, and $40,000 is back in play.
On the downside, though, a break of Monday’s low puts the $29,000 to $30,000 area in play, which was key support during the summer.
Top Stock Trades for Tomorrow No. 2: Apple (AAPL)
I wondered how long Apple (NASDAQ:AAPL) and some of the other big names could hold up with everything else around it coming down so hard. We are getting our answer, with Apple and others rolling over.
Currently, Apple is finding buyers near the 21-month moving average and the third-quarter high near $157.
If it can clear Monday’s high, it will have a gap-fill in play up toward $162.30. That is significant because that level is also last week’s low. It will be important to see whether this level acts as resistance or if it’s reclaimed.
If it’s resistance, this week’s low and the 21-month moving average remain vulnerable. If it’s reclaimed, the 10-day and 50-day moving averages are in play. Should it make new lows, we can’t rule out a test of the $150 level and the 200-day.
Top Stock Trades for Tomorrow No. 3: Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) offered a pretty sly little trade on Monday, but it wasn’t without risk. Unlike Apple, it gapped below its 200-day moving average.
However, it’s bouncing from the 50-week moving average and the weekly VWAP measure. That came after it undercut the Q4 low at $280.25.
Back above that mark gave active bulls a long position, with a stop just below Monday’s low.
Above the 200-day, and Microsoft may make another run back to $300. However, on a break below this week’s low, $262-ish could be on deck.
Top Trades for Tomorrow No. 4: Palantir (PLTR)
Lastly, we have Palantir (NYSE:PLTR). I have never been a big PLTR stock fan, simply because I didn’t think its growth rate justified its valuation. However, at times I have been bullish because of the technicals.
That catalyst died a long time ago as the stock is in total free-fall mode.
Once it was rejected by the $17 level, that was time for recent dip-buying bulls to get out.
I’m not rushing in to buy this name. However, if PLTR stock is your thing, keep an eye on the $11 to $11.45 area. The latter is the day-one high from when it started trading about 18 months ago.
$11 was the breakout area. If this area holds, it may be good for a decent bounce. If it fails, though, $10 and/or the all-time lows may be in play.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
