Earnings continue to be the focus. And on Thursday, no company is taking the spotlight like Tesla Inc (NASDAQ:TSLA). With that and a notable reversal in the overall markets in mind, let’s look at our top stock trades for Friday.
Top Stock Trades for Friday #1: Tesla (TSLA)
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Tesla beat on earnings, revenue and gross margin estimates. But there were a number of issues with the quarter and apparently, CEO Elon Musk doesn’t like too many “dry” questions on the conference call.
So where does that leave the stock? Once Tesla put in a low around $250, we said it needed to push back above $300 for bulls to be back in control. I’m sticking with that belief. Below $300 and Tesla stock is in no man’s land and a retest of $250 is in the cards. Above $300 and bears might want to think about covering their shorts. Longer term, is Tesla going to $400 or $200?
Top Stock Trades for Friday #2: S&P 500 Index (SPY)
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In the first few hours of trading, the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) was feeling plenty of pain. But then we got a strong reversal.
The bounce came cleanly off the 200-day moving average. While the bounce is certainly encouraging, bulls are far from out of the woods. There’s clear downtrend resistance (black line on the chart) while the SPY now needs to fight through the 50-day and 100-day moving averages.
Should the ETF break down from these levels or fail at resistance, a revisit of the 200-day moving average could be in order. Below that and a retest of the opening/closing lows around $256 is possible.
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After earnings fueled a big decline in 3M Co (NYSE:MMM), shares appear to be on the mend.
At the time of the fall, we said prospective investors should be patient and wait for a decline into the low $190s. If MMM holds and they are a bullish, that would be their trigger to go long with a defined risk/reward. We got just that as 3M is trying to carve out a bottom. A solid bounce could be in order should this level hold.
Here is the chart we looked at before as our setup.
Top Stock Trades for Friday #4: Nvidia Stock (NVDA)
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Even before the markets turned higher, Nvidia Corporation (NASDAQ:NVDA) was a beacon of strength for investors on Thursday.
With earnings on tap for May 10th, investors may try to bid this name up into the event. After all, it has been in a lull for most of the year, trapped between $215 and $250. With Thursday’s rally, NVDA is pushing through a short-term downtrend line (black line). Should it gain strength, a retest of $250 resistance could be next.
On the flip side, should resistance hold up or if the 50-day gives NVDA a problem, shares could head back to $215 support. Long-term bulls shouldn’t hate the idea of NVDA testing its 200-day moving average either. That would provide a great buying opportunity in this long-term winner.
For the record, Intel Corporation (NASDAQ:INTC) still looks good too.
Top Stock Trades for Friday #5: Alibaba (BABA)
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Noted short-seller Andrew Left — who recently hit Square Inc (NYSE:SQ) — is known for the occasional long call. This time, it’s Alibaba Group Holding Ltd (NYSE:BABA) he’s bullish on.
After a steep downward reversal off its rally to $185, BABA stock is stabilizing over the 200-day moving average. Bears are still in control, but there’s one way bulls can reverse the momentum. If Alibaba can push above and closer over $185, it will clear three levels of resistance: $185 as level resistance (blue line), the 50-day moving average and the 100-day moving average.
Should that happen, resistance could come in the form of a downtrend line near $195. Over $192 to $195 and BABA could gain some serious momentum, but let’s go one step at a time. Bulls can buy a breakout over $185 or a pullback into the $165 to $170 area. Should $185 hold, bears can likely press their luck.
NOTE: Alibaba reports earnings on Friday before the open.
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.
