The market’s setting up for another round of big swings, and a handful of stocks are flashing strong trade setups.
Whether you’re looking for a short-term momentum play or a longer-term breakout, these three names deserve a spot on your radar.
Carvana (CVNA) Could Be Gearing Up for a Reversal
Carvana has been on a wild ride, and after a sharp drop, it looks like it’s setting up for a bounce. I closed my short position near the lows last week, expecting a move higher before reassessing.
The stock is approaching a key resistance zone, and how it reacts here will determine the next big move.
If CVNA can break above resistance, it could signal a new leg up. But if it rejects and breaks back below its Roadmap line, the downside could be back in play.
I don’t like chasing shorts, so I’ll wait to see where this one lands before considering another move.
Shopify (SHOP) Setting Up for a Strong Rebound
Shopify is another name I’m watching closely. It’s pulled back to its Roadmap line, which has historically been a solid support level.
If the stock holds this zone and starts turning higher, it could offer a strong risk-reward setup.
For aggressive traders, an entry here with a stop around $85 to $90 makes sense. A more conservative approach would be to wait for a break above $118, which would confirm the move higher.
If that happens, the next target is in the $136 to $137 range.
I’ve traded SHOP successfully in the past, using a synthetic stock position — buying a call and selling a put to finance the trade. That play turned into a monster win, and while I’m not saying I’ll repeat it, I like what I see so far.
Five Below (FIVE) Still Has Room to Drop
Unlike the first two, Five Below isn’t looking bullish yet…
The stock has made a three-wave corrective move, and it still looks like there’s more downside ahead. I expect it to make a lower low, possibly under $63.50, before it finds a real bottom.
Long-term, FIVE has strong fundamentals, but I’m not trying to catch a falling knife. If it extends down into the $49.50 zone or even lower, that’s where I’d start paying closer attention for a reversal.
Markets are constantly shifting, and the best trades come from waiting for the right setups. Carvana and Shopify look promising for upside moves, while Five Below likely has more room to fall. Keep an eye on these levels, and let the market show its hand before jumping in.
Jeffry Turnmire
Jeffry Turnmire Trading
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