With some big-name companies reporting their quarterly results, we’re getting into the thick of earnings season. That leads to big moves for individual stocks — both higher and lower. With that in mind, let’s take a look at some of the top stock trades for tomorrow.
Top Stock Trades for Tomorrow #1: Twitter Stock
Twitter Inc (NYSE:TWTR) reported another quarter of solid earnings results. It’s giving investors hope that Twitter’s recent improvements are a trend rather than just a one-quarter phenomenon.
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Over $30 is definitely more promising for bulls and while I added a small trend-line (in black), the 100-day moving average seems to be a better indicator for Twitter stock. Cautious bulls can use this level as their downside stop-loss if they want to limit downside risk. Twitter hasn’t closed below its 100-day since October and should have further upside should this level hold in the near-term.
Top Stock Trades for Tomorrow #2: PayPal Stock
PayPal Holdings Inc (NASDAQ:PYPL) is on my radar, but looks like it could give way to lower prices. It reports earnings on Wednesday after the close — so definitely take a look Thursday morning.
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The valuation is a bit high, although one could argue it’s deserving of it given its long-term growth rates. We highlighted worry in Square Inc (NYSE:SQ) yesterday and more weakness has followed. Will the same happen to PYPL?
A rough level of support is down near $73. Should it give way, the hope is that the 200-day moving average will hold up. The worry is that it won’t. So what’s the play?
Wait for PYPL to report and investors will get some more direction. If shares break below the 200-day and $70, bears will have a risk-defined shorting opportunity. Likewise, over downtrend resistance (blue line) and bulls can make a case that new highs are coming.
Top Stock Trades for Tomorrow #3: Boeing Stock
Boeing Co (NYSE:BA) reported earnings on Wednesday before the open. Unlike some defense names and other industrials, shares are on the rise.
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Boeing stock has been in a heck of an uptrend. Those types of trades don’t give up without a fight. Heck, here’s 7 others in a strong uptrend as well. Shares could run into a bit of resistance near $350, but BA is still respecting its trend-line. So long as that’s the case, bulls can stay long.
Top Stock Trades for Tomorrow #4: GE Stock
The everlasting question remains: has General Electric Co (NYSE:GE) finally put in a bottom?
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At some point, GE stock will bottom. After its earnings last week, it looked like that point may have arrived — but we’ve seen plenty of false bottoms in GE over the past 12 months. With an investor meeting not doing it any favors on Wednesday, GE faces a critical test: $14.
Will this level hold up as support or give way? The 50-day moving average is also near this level. Should it fail, it will deal a serious blow to bulls’ confidence. It would also put the recent lows under $13 back on the table. Bulls and bears who want to be nimble with GE can use $14 as the basis for their game-plan. Below it is bad for bulls and above is good.
Cracking the downtrend line (in blue) is priority No. 2 for bulls, right behind seeing $14 hold as support.
Top Stock Trades for Tomorrow #5: Chipotle Stock
It’s always encouraging to see a stock do well while the market is under stress. In this case, Chipotle Mexican Grill, Inc. (NYSE:CMG) is one of those stocks.
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Shares are hanging out above $330 and that’s great, but it continues to bump its head up against $340 resistance. Note that the company reports earnings after the close Wednesday. Like PayPal, it’s nice to see these setups before earnings, because it gives traders a definite “if this, then that” proposition rather than guessing ahead of time.
Well-received earnings should put CMG over $340 and could set it on course to $400. If investors sell the news, look for support to come into play at $300 or near its collection of its major moving averages, all sitting between $315 and $320.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities.
