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5 Top Stock Trades for Wednesday Morning

top stock trades - 5 Top Stock Trades for Wednesday Morning

The markets aren’t reacting much to the White House’s successful dealing with North Korea. Perhaps it’s because of the upcoming Federal Reserve meeting on Wednesday. Despite that, there are a lot of good setups making our list of top stock trades.

Top Stock Trades for Tomorrow No. 1: United Parcel Services (UPS)

Top Stock Trades for Tomorrow No. 1: United Parcel Services (UPS)
Source: Chart courtesy of StockCharts.com

Earlier this month, we flagged the increasing odds of a breakout in FedEx Corporation (NYSE:FDX). Well, now United Parcel Service, Inc. (NYSE:UPS) is playing along too.

This one is clean and simple and those are the setups we like best.

Over $118 and UPS stock is technically in breakout territory. Should that level give way and ultimately turn into support, look for UPS to run to $124. If it can build momentum, like FDX, its prior highs will be on target.

Trend-line support has been climbing sharply, I admit, but it has held so far. A break below and bullish traders can hit the exits.

Top Stock Trades for Tomorrow No. 2: U.S. Steel (X)

Top Stock Trades for Tomorrow No. 2: U.S. Steel (X)
Source: Chart courtesy of StockCharts.com

A lot of stocks are acting well and like UPS, United States Steel Corporation (NYSE:X) is one of them.

The market is clearly in a rhythm, because we have so many stocks within different sectors all flashing similar setups. I like that. X stock has the same pattern as UPS: higher lows and it’s butting its head up against resistance.

Maybe resistance holds and pushes X stock back down to support. But with support sitting just about a buck-a-share lower than resistance, one of these two levels is going to give way soon.

Because of the trend, bulls are hoping the one that gives in is $38 resistance. Should it do so, look for a rally into the low-$40s. If $38 holds and trend-line support fails, X stock is likely heading down to the mid-$30s.

Top Stock Trades for Tomorrow No. 3: Nucor (NUE)

top stock trades for this week
Source: Chart courtesy of StockCharts.com

UPS and FDX trade in somewhat a harmony, why not X and Nucor Corporation (NYSE:NUE)?

You’ll notice in my disclosure below that I’m long X (for the solid risk/reward breakout trade) and not NUE. Over $66 was a big move for NUE and like X, it sits just below resistance.

However, it doesn’t have as strong of support nearby, which was my only real reason for going with X over NUE. I could measure my risk more clearly and I find that more important than the potential reward.

Should steel stocks advance, NUE is unlikely to be left behind. Should NUE breakout too, look for a close north of downtrend resistance, near $67.50.

Top Stock Trades for Tomorrow No. 4: FMC Corp (FMC)

Top Stock Trades for Tomorrow No. 4: FMC Corp (FMC)
Source: Chart courtesy of StockCharts.com

I don’t think we’ve ever talked about FMC Corp (NYSE:FMC) in the “top stock trades” piece. It’s a company with a unique business, benefiting from a forced asset sale in the DowDuPont Inc (NYSE:DWDP) merger and an in-demand lithium business.

In any regard, we’re not here to discuss its fundamentals. Luckily though, its chart is giving us something to work with.

There’s clearly support in this $85 to $88 area for FMC stock. Along with a slightly rising 200-day moving average, bulls have some cushion just below current prices. Should short-term traders take a long position, they could do with a solid risk/reward near current levels.

Should support hold, my first target would be $94.

Top Stock Trades for Tomorrow No. 5: Twitter (TWTR)

Top Stock Trades for Tomorrow No. 5: Twitter (TWTR)
Source: Chart courtesy of StockCharts.com

We were buyers of Twitter Inc (NYSE:TWTR) in the teens, low-$20s and most recently on that pullback to $27. The calls can be found all over InvestorPlace. But we didn’t stay aggressive enough with TWTR.

In early June, we did say investors could buy a breakout over $37, but we were certainly starting to look for the exit, rather than the entrance. That was as TWTR stock was running toward what seemed to be previous resistance near $37 and it was becoming overbought. Shares broke through with ease the next day and again through $42 resistance shortly after.

Some of the most respected Twitter traders (no pun intended) that I follow have marked the name for more upside. Some — and including JPMorgan analysts now — are looking for a run to $50 or higher.

Maybe TWTR will do just that, but not before a pullback in my eyes. Since Twitter is sporting an RSI of 86 and a big-time rally of more than 40% over the past six weeks, look for it to cool off. If $42 fails as support, look for its prior highs near $37 to hold up.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, he held positions in X, FDX and UPS. 

Article printed from InvestorPlace Media, https://investorplace.com/2018/06/5-top-stock-trades-for-wednesday-morning/.

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