5 Top Stock Trades for Thursday — Buy Alibaba Into Support?

Here are the top stock trades we're watching for Thursday morning

Top stock trades for Thursday

After Tuesday’s reasonable “turnaround,” investors took the full brunt of selling pain on Wednesday, with major indices falling about 1%. Chinese stocks remain under pressure and a big cannabis deal took place. Let’s look at our top stock trades.

Top Stock Trades #1: Alibaba (BABA)

top stock trades for BABA

It’s been tough sledding for Alibaba (NYSE:BABA) and quite frankly, the rest of the U.S.-traded Chinese stocks. Be it JD.com (NASDAQ:JD), Huya (NYSE:HUYA), iQiyi (NASDAQ:IQ), Baidu (NASDAQ:BIDU) and many others. It’s been bad.

Trading at less than 28 times earnings, with nearly 60% revenue growth this year and +20% earnings growth, Alibaba is one of the strongest Chinese tech stocks around.

It’s also nearing long-term support near $165 and that sets traders up with a great risk/reward. If they buy BABA near current levels and $165 fails, they can bail. If it holds, a rebound into the low- to mid-$170s should be in the cards.

Top Stock Trades #2: Macy’s (M)

top stock trades for Macy's earnings

Despite a top- and bottom-line earnings beat at Macy’s (NYSE:M), shares fell hard on the day, dropping more than 14%.

Aggressive traders have a setup though. Macy’s stock has tended to trade in a range, before breaking higher. On the chart, that can be seen by a series of blue rectangles. While the base of this rectangle is certainly lower, $35 has proven to be solid support in the past.

It’s also where the 100-day moving average comes into play. Should it fail, the prior range ($27 to $32) could be in play, as could the 200-day moving average near $29.50.

Top Stock Trades #3 and #4: Constellation Brands (STZ) and Canopy Growth (CGC)

top stock trades for STZ

Is Constellation Brands (NYSE:STZ) the new go-to pot stock? I don’t know if I would say that, but it’s $4 billion investment in Canopy Growth (NYSE:CGC) certainly shows promise in the latter.

Constellation CEO Rob Sands calls CGC its “exclusive global cannabis partner,” another ringing endorsement.

Anyhow, the move clobbered STZ, which fell more than 8% at one point on the day and launched CGC, up more than 30%. As seen above, it put STZ into critical support, which InvestorPlace buyers surely bought because we called out this level about a six weeks ago and said to keep it on watch.

As for CGC, seen below, it put shares right into resistance. A close over $36 could be bought by momentum traders.

top stock trades for CGC

Top Stock Trades #5: Micron (MU)top stock trades for Micron

Earlier this month, Micron (NASDAQ:MU) broke below key uptrend support. That’s after topping near $62 and hitting downtrend resistance multiple times since May.

Sheesh, it doesn’t look good. Wednesday’s 6% plunge put Micron below its 200-day moving average as well. From a bullish standpoint, MU is looking broken at the moment.

Bulls who still like it can consider a long into this $44 to $46-ish area of support. But I find Micron more attractive when it’s sailing with the wind at its back — not through a monsoon.

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.

Article printed from InvestorPlace Media, https://investorplace.com/2018/08/5-top-stock-trades-for-baba-cgc-stz-m-mu-tsla/.

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