The S&P 500 is about 50 basis points higher on Thursday, with renewed optimism that the current trade talks will not escalate into a full-blown trade war. That rally highlights several top stock trades as we near the end of this holiday-shortened trading week.
Top Stock Trades for Tomorrow #1: Advanced Micro (AMD)
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When stocks were showing a larger sign of selling off, we had the $13.50 level on watch for Advanced Micro Devices, Inc. (NASDAQ:AMD).
That would have brought AMD stock to the backside of downtrend resistance. If it held up as support, it would represent an excellent buying opportunity. The problem is, as that trend-line continues to fall as downtrend lines tend to do, our buy trigger falls lower and lower.
If AMD stock is truly in demand, it may no longer be a realistic target. Instead, $14.50 is emerging as a viable candidate. This level was resistance all through 2017 and only just recently began acting as support in June.
Now about 90 cents away, conservative bulls can wait for a pullback and buy near this level. Aggressive bulls can sell cash-secured puts, perhaps the $15s, and if exercised the premium collected will put their cost basis close to this level.
Below $14.50 and perhaps that downtrend line is in the cards after all.
Top Stock Trades for Tomorrow #2: Alphabet (GOOGL)
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Alphabet Inc (NASDAQ:GOOGL) continues to consolidate in the perfect zone.
After breaking through downtrend resistance, shares continue to find support just above this level. The 50-day and 100-day moving averages are both nearby too, which should provide some extra support should GOOGL and the Nasdaq experience some selling pressure.
For now, KISS — keep it simple. Above former trend-line resistance is bullish while below is not.
Top Stock Trades for Tomorrow #3: Netflix (NFLX)
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Speaking of consolidating, look at the excellent price action of Netflix, Inc. (NASDAQ:NFLX).
Some investors may not like the recent action or complain that it is stalled. But keep in mind that Netflix stock is up more than 100% so far in 2018! It needs to consolidate some of these moves and this is very healthy price action.
Shares are gearing up for another big move, that much is clear. The only thing we need to figure out is which direction. If the past is any indication, that direction will be higher.
Watch for a move up to $405 to $410. Should we get it, it could spur a rally back to its previous highs near $420 and possibly even new all-time highs above that.
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InvestorPlace readers haven’t missed out on the rally in Ventas, Inc. (NYSE:VTR) and a number of other REITs. The group hasn’t been held back by the rise in interest rates and continues to surge higher.
However, VTR could be running into some resistance. If I was long from say $50, I might be content to stay long this high-quality company and collect a big dividend.
I wouldn’t be a new buyer today, though.
The RSI of 77 shows that VTR is overbought (blue circle) and $58 to $59 could act as resistance. A pullback into the $54 to $55 area should be bought, as there should be multiple levels to support VTR.
$53 should also hold up, both as a support level and near the backside of previous downtrend resistance (blue line).
Top Stock Trades for Tomorrow #5: Take-Two (TTWO)
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Take-Two Interactive Software, Inc (NASDAQ:TTWO) continues to trade well, like its video game peers Activision Blizzard, Inc. (NASDAQ:ATVI) and Electronic Arts Inc (NASDAQ:EA).
Like GOOGL stock, remember to KISS. Trend-line support (blue line) continues to hold up. Resistance near $117.50 to $120 has held strong since November. It’s slowly but surely pushing above this mark. Should it breakout, its prior highs near $130 are the first target.
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.
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