The stock market continues to move, as traders discovered at the beginning of a new week. Monday’s market participants were subjected to volatility as the market continues to weigh the economic impact of the novel coronavirus. Today’s big stock charts offer some interesting opportunities.
Much of the trepidation revolves around whether the economy will be reopened soon. We can only hope for a swift flattening of the “coronavirus curve” so that life can return to something resembling normalcy.
A handful of stocks were pushed deep into the red on Monday. Are these buying opportunities?
Let’s dive into Tuesday’s big stock charts, all of which might or might not present a chance to buy famous names on the cheap.
Caterpillar (CAT)
A famous construction-sector name in the Dow Jones Industrial Average, Caterpillar (NYSE:CAT) stock printed a red candlestick at the start of the week. Will it play catch-up in the days ahead?
- If anybody was wondering whether the top of that falling wedge would continue to provide resistance, Monday gave you the answer. Ouch!
- Monday’s candlestick was not only a big gap down, but also a large red marubozu candle. That means it went down pretty much all day without stopping until the market closed.
- From a technical standpoint, the first of our big stock charts looks like it just went up too fast for its own good. Traders should revisit this stock at the $90 support level.
Royal Caribbean Cruises (RCL)
It’s not necessarily easy to trade a quick mover like Royal Caribbean Cruises (NYSE:RCL). Monday’s price drop was proof of this. As the second of our big stock charts shows, however, sometimes stocks that go down fast can recover just as quickly.
- It looks like the double-bottom could end up being a triple-bottom. If you’re ready to bet on that, then the $25 support level is worth keeping an eye on for a long position.
- Don’t let the size of Monday’s candlestick fool you. It was a monster 17% single-day move, and not in the bulls’ favor.
- On the other hand, the upside potential is huge here. Don’t get greedy, though, as $60 would be a perfectly reasonable place to take profits.
Ford (F)
Ford (NYSE:F) stock represents an inter-generational company that has survived major challenges. Will the stock and the company demonstrate the resiliency of the American automotive market?
- “Ford at four” is my mantra now, meaning that $4 is a great price for this stock. The double-bottom chart pattern reflects this.
- The lower wick on Monday’s candlestick indicates that at least it didn’t “close on the lows.” That would have been a bearish sign, but thankfully for the bulls, it was averted.
- Longer-term, it makes sense to take profits at $8.50. That was the main support level for a while, but now it’s resistance.
As of this writing, David Moadel did not hold a position in any of the aforementioned securities.