While it’s just one stock, the market was actually pretty resilient in the face of Facebook’s (NASDAQ:FB) dreadful earnings reaction. That said, a number of names are struggling right now after what many expected to be a great earnings season. Let’s see how some top stock trades are shaping up heading into Friday.
Top Stock Trades for Tomorrow #1: Facebook (FB)
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Is it any surprise we’re beginning the piece with Facebook? While the company beat on earnings estimates, it missed on revenue expectations. Even worse, management painted a terribly dire situation on the conference call. It’s almost as if they wanted the stock to be hammered into oblivion.
In any regard, this massive $500 billion market cap company shed about 20% on Thursday. So where to from here?
It’s no surprise FB stock found support just under $170. That said, it better hold. If not, the possibility of falling back down to that $150 to $155 range is back on the table.
While Facebook’s fundamentals appeared strong before Wednesday evening, the snapback proved to be too much, too fast. Unlike its FANG brethren Netflix (NASDAQ:NFLX), Facebook didn’t get a generous rebound.
See how shares handle Thursday’s range. Above the highs and short-term investors can go long. Below and a drop down to its prior lows are on the table.
Top Stock Trades for Tomorrow #2: Ford (F)
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The reaction to Ford (NYSE:F) wasn’t any more inspiring than FB. Shares tumbled 6% in what was a not-so-surprising reaction given the earnings results out of General Motors (NYSE:GM) the day before.
Hopefully InvestorPlace readers were able to sidestep the pain, given that we said investors shouldn’t bite on Ford yet.
Now just below that mark, F finds itself clinging to a vital area near $9.90. Below here and Ford stock could find itself in no man’s land. The 6% dividend yield is doing little to help and if investors want a more dependable yield, they may want to consider AT&T (NYSE:T) instead.
Ford unfortunately is not looking good. New buyers can justify a long position with a short leash, but a bounce beyond $10.50 is looking quite difficult at the moment.
Top Stock Trades for Tomorrow #3: Raytheon (RTN)
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Another name on the cusp of worry? Raytheon (NYSE:RTN). Despite beating on earnings and revenue, investors were quick to smack this one lower.
At one point, RTN broke below key $190 support. With a stiff downtrend line in place, Raytheon is becoming a concern despite its strong fundamental story. Like Ford, InvestorPlace readers were again spared of the downside.
Below $190 and there’s no reason to be long this defense stock. Should $190 hold and shares bounce, look to see how it handles downtrend resistance. Failure to break through this mark (and thus the 50-day and 200-day moving averages) increases the likelihood that $190 support fails in the future.
If that happens, Thursday’s lows, at a minimum, are the target.
Top Stock Trades for Tomorrow #4: Under Armour (UAA)
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Under Armour (NYSE:UA, NYSE:UAA) was able to climb about 5% after beating on revenue expectations and reporting in-line earnings results on Thursday.
However, shares were not able to hold onto the strong gains that it had at the start of the session. Now just below $22, bulls longing to buy the stock should wait for a close over this level.
Why?
The rationale is simple. $22 has been a tough layer of resistance for some time. Further, the 50-day has played a notable role in UAA’s price action over the last two years. Both marks sit at the $22 level.
If UAA is able to hurdle that mark with authority, something it did in the beginning of Thursday’s session when it ran to $23, then bulls can own the stock. Over this vital mark and bulls can aim for the recent highs near $25. They can bail on a close below $22, which gives them an attractive risk/reward.
Top Stock Trades for Tomorrow #5: PayPal (PYPL)
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Time for some good news, and we have it with PayPal (NASDAQ:PYPL). Despite beating on earnings per share and revenue expectations, PYPL stock is down slightly on Thursday.
However, $86 support held just fine, showing that the mobile payment platform is likely in a new range. The prior range between $70 and $86 was in place for some time. Until PYPL breaks below $86 though, there’s little reason to get too bearish on the name.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell was long T and GM.
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