The Dow, S&P 500 and Nasdaq weren’t able to hold onto their Thursday morning gains, turning slightly lower on the day. However, small-caps were again able to power to new highs. With that in mind, let’s look at small caps first in our line-up of top stock trades.
Top Stock Trades for Tomorrow #1: Russell 2000 (IWM)
Click to Enlarge
The iShares Russell 2000 Index (ETF) (NYSEARCA:IWM) again burst to new highs on Thursday, continuing its powerful rally while large cap stocks still try to sort out which direction to go. This leadership action has historically boded well for U.S. equities.
In any regard, how do we trade the IWM from here?
I would like for the IWM to find support near $160 when it does eventually cool down. The lower tax rate is a boon for operations, while the strong dollar doesn’t impact small cap companies the way it does to large multi-national corporations. As a result, and because small caps are relatively isolated within the U.S., investors should continue flocking to the group.
If $160 fails to hold as support, look for a pullback into trend-line support or the 50-day moving average.
Top Stock Trades for Tomorrow #2: Voya Financial (VOYA)
Click to Enlarge
What a beautiful move have in Voya Financial Inc (NYSE:VOYA).
Shares powerfully broke out over the $54 level and allowed for VOYA to make new highs. I love a straight-forward chart and this one is simple. Over the breakout level and bulls are in firm control of Voya.
Click to Enlarge
The Goose is on the loose! With Canada Goose Holdings Inc (NYSE:GOOS) running wild this week, that appears to be the case.
GOOS is getting a bit extended as this point, but I wouldn’t feel confident shorting it on this observation alone. I’d rather buy a pullback into the $38 to $39 level, assuming it holds as support.
If it does, buyers can step in. Either way though, there should be plenty of support below, with trend-line support not far behind.
Click to Enlarge
Let’s end the day with a look at the retail sector, starting with Under Armour Inc (NYSE:UA, NYSE:UAA).
Shares are hitting their highest levels since last July and adding to their monthly gains so far. UA stock has now run from $15 at its lows to $18 in just a few weeks, after beating earnings per share and revenue estimates earlier this month.
Breaking over $17 was a big move, in my view. This has been a significant level over the past 15 months or so. With shares now somewhat overbought, a pullback from $18 down to $17 would be highly constructive for the bull case — provided $17 holds as support.
If it fails notably, a drop down its 50-day moving average could be in the cards.
Top Stock Trades for Tomorrow #5: J C Penney (JCP)
Click to Enlarge
Falling to its lowest levels since last November, the price action in J C Penney Company Inc (NYSE:JCP) is the complete opposite of that in UA. Shares dropped more than 13% Thursday after the struggling retailer reported earnings.
On the charts, we can see current downtrend resistance (purple line) is still in full force. We can also see that support just below $3 has given way. That puts JCP’s 52-week low of $2.35 back on the table.
The one lifeline for JCP can come into play just below $2.50, that being the prior downtrend line (in black). In 2018, JCP pushed through this level and has found support along it several times since. If it can’t hold up this time, look out below.
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.
