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From the Sohn Conference in New York to trade-sanction impacts on public companies and a look at the broader market, Monday has already given investors a lot to chew on. Let's look at some of the top stock trades to watch for Tuesday morning.
Top Stock Trades for Tomorrow Morning #1: Box Stock (BOX)
Box Inc (NYSE: BOX ) shares are jumping Monday, climbing almost 15% at one point after Chamath Palihapitiya, founder of the venture capital firm Social Capital called Box an enticing A.I. play. The business is "incredibly cheap and undervalued with incredibly low churn and unbelievable margin of safety," he said. Others have liked it for its cloud exposure .
But what do the charts say? It says that $24 is going to be a real tough nut to crack. Failing at this level since 2015 and most recently in February, BOX has had trouble pushing through. However, with a steady weekly trend-line forming in early 2017, the setup suggests Box could be a top stock trade in 2018 should it break through $24. Keep an eye on this one and watch for a possible pullback into support.
Trades for Tomorrow Morning#2: Alcoa Stock (AA)
Alcoa Corp (NYSE: AA ) looked like a top stock trade for bulls before Monday's trading session. After a strong rally was followed by more post-earnings gains, bulls were feeling mighty confident. Then news of loosening sanctions against Russia sent shares tumbling.
AA stock fell about 14% on Monday, dropping quickly below $57.50. This former high had seemed like it would act as support, especially over the past few trading sessions. That theory proved false. AA now looks destined for the $48 to $50 level - so it still has more to fall. This area is shown on the chart with a blue rectangle.
Investors should note, however, that AA will likely remain volatile so long as headlines control the stock price.
Top Stock Trades for Tomorrow Morning #3: Dow Jones Industrial Average ETF (DIA)
The Dow Jones, expressed below as the SPDR Dow Jones Industrial Average ETF (NYSEARCA: DIA ), is under pressure Monday, falling about 50 basis points. Where does that leave the index?
From the end of January through mid-April, the DIA had been victim of a downward trend-line. That made it hard for the Dow to be a top stock trade for bulls and made for solid short opportunities for the bears (finally). However, in April the DIA broke over this downtrend line and with Monday's decline, we see it testing the backside of this trend-line.
Now it's simple: If it holds, a bounce is in store for the bulls. A break below would be a signal for more declines. Either way, both bears and bulls have defined entries and risk/reward setups. Should DIA break down, a decline back to the month's lows could be in store.
Trades for Tomorrow Morning #4: Henry Schein Stock (HSIC)
Henry Schein, Inc. (NASDAQ: HSIC ) announced that it will spin off its animal health business and merge it with another. That's causing shares to pop more than 6%.
Will this pop last? Here's what I need to see from HSIC stock. On the weekly chart, we can see a support/resistance line between $72 and $74, as well as a downtrend line of resistance currently near $73. In other words, there's a decent (but not impossible) amount of resistance to push through.
It's only Monday, so there's plenty of time for things to go great or go terribly wrong for HSIC stock this week. A close above $74, preferably at or above $75, would get me a lot more excited about the name while a close below trend-line resistance would keep me out of HSIC.
Top Stock Trades for Tomorrow Morning #5: Hasbro Stock (HAS)
Hasbro, Inc. (NYSE: HAS ) investors were not happy about the company's earnings before the open this morning. That's changed throughout the session though.
After falling almost 5% near the open, HAS stock climbed more than 3% Monday. The reversal pulled HAS out of no man's land and put it back above the significant area of $83 to $85. While bulls may breathe a sigh of relief, they need to use caution.
HAS stock is still below all three moving averages and has a downward trend-line hanging over top. $90 may not be the most generous level for bulls, either. However, if it can find some support from $85 and consolidate in the mid- to upper-$80s, HAS could start to build out a base. Bears will want to crack $85 and look to target Monday's lows if they can.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell . As of this writing, Bret Kenwell held a long position in BOX.
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