Trade worries in the morning put a damper on stocks, but investors are fighting through it. All three U.S. equity indices are now solidly in the green Thursday, even with the U.S. jobs report hitting the wires on Friday before the open. With that in mind, let’s look at our top stock trades for tomorrow.
Top Stock Trades for Tomorrow #1: Tesla (TSLA)
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Our first one had to be Tesla (NASDAQ:TSLA) right?
The electric-car maker missed on earnings but beat on revenue estimates and eased investor concerns over its cash situation. Further, Tesla burned through less cash in the quarter than expected and still expects to be cash flow positive and GAAP profitable in the third and fourth quarters.
That to me, at least buys it the six to nine months of coasting and with almost 30% of the stock sold short, there’s plenty of short-squeeze potential should TSLA really gain momentum.
You can see trendline support failed, as did level support between $300 and $310 leading up to earnings. Post earnings though, shares not only recovered above those levels, but also the 50-day, 100-day and 200-day moving averages, as well as downtrend resistance. Next stop? Likely $360. Above there puts its recent $375 highs back in target and opens up the possibility of a run to $400.
Below downtrend and trendline support, short-term bulls may consider stopping out.
Top Stock Trades for Tomorrow #2: Fitbit (FIT)
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Not enjoying its earnings is Fitbit (NYSE:FIT). The quarter was okay, but far from great. Investors made that clear on Thursday.
Investors can short FIT now that it’s below trend-line support and all of its major moving averages. I don’t particularly care for shorting $5 stocks that have no debt and a reasonable amount of cash on hand. That’s especially true when it has a ~$1 billion market cap.
Then what’s the play? FIT is a no-touch for me on the long side and it’s likely heading for no man’s land. Bulls can consider buying if it gets back over its 100-day and 200-day moving averages and trend-line support.
Top Stock Trades for Tomorrow #3: Square (SQ)
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Twitter (NYSE:TWTR) might have been a dud, but Jack Dorsey’s other company is having a post-earnings blast with Square (NYSE:SQ) stock rocketing higher Thursday.
Now bumping into that $72.50 resistance that slowed SQ down a few sessions ago, it could run into the mid-$70s if it’s able to push through. From there, channel resistance might slow its roll a bit, but this baby is far from overbought (pink circle).
This stock is a buy-on-dips until the trend fails. For now, buying a half position at the 50-day and the other half at the 100-day has worked well. We sold our 50-day buy a little early in the session, but some profit is better than none.
Top Stock Trades for Tomorrow #4: Baidu (BIDU)
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It’s been a painful few weeks for Baidu (NASDAQ:BIDU), which has slid from about $270 to $230 over that span.
The good news? BIDU could be setting for a buy for those that like the name. Personally, I’d rather stick with an Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) because the stock trades better, (here’s the other side of that trade though).
But those who want BIDU can go long and look for a rebound toward the $240s. Should Baidu lose $225, investors may want to consider stopping out.
Top Stock Trades for Tomorrow #5: Facebook (FB)
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Facebook (NASDAQ:FB) has been annihilated since reporting earnings, but is starting to get its footing back.
After six tough sessions, the $170 level has proven solid as the social media giant is beginning to rally. Keep it simple: Over $170 is bullish for FB and below is not. Keep an eye on that trendline of support.
If FB loses both levels, the lows near $150 may be on the table.
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.
