We finally heard from the biggest company of all, Apple (NASDAQ:AAPL). The company delivered a very solid beat all around and provided strong guidance. That’s giving some relief to a beaten down tech sector. With Apple making new highs, let’s make it first on our top stock trades list.
Top Stock Trades for Tomorrow #1: Apple (AAPL)
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What’s to hate in the earnings report for Apple? Top- and bottom-line earnings beat, better-than-expected guidance, strong margins, impressive growth from Services and strong selling prices for the iPhone.
The fact that Apple is now less than $15 billion away from hitting a $1 trillion market cap isn’t surprising. That’s just a $3 to $4 increase in the share price.
In all likelihood, Apple will get there. There could some resistance in the way (as shown on the chart), but that trend doesn’t have a lot of history. When combined with a slightly overbought condition though (according to the RSI at the top of the chart), and how close it is to $1 trillion, it’s not crazy to think Apple could tag that mark and then pullback.
Look, I’m by no means a seller of Apple. It had fantastic earnings and as we can see with the purple line on the chart, sometimes trending resistance can become support.
Should Apple pullback, there is a plethora of support below and it should be bought.
Top Stock Trades for Tomorrow #2: Amazon (AMZN)
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In short, Amazon (NASDAQ:AMZN) has been amazing. Tech has been under pressure, but should it regain its footing, a rebound from Amazon will be in order.
If it does so, it will likely take Amazon back to the top of its channel, near $1,900 or possibly above. It opens up Amazon to the possibility of hitting $2,000 sometime this quarter.
Short-term bulls should turn cautious on a close below $1,750 and outside the current channel. I said cautious, not bearish though. On a deeper pullback, consider buying near $1,650 to $1,660. Support should come into play, along with the 100-day moving average.
Top Stock Trades for Tomorrow #3: iQiyi (IQ)
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It’s been a little while since we took a look at iQiyi (NASDAQ:IQ). After reporting earnings, “the Netflix (NASDAQ:NFLX) of China” has been mixed. Initially rallying, shares have had trouble maintaining any upside.
Twice we highlighted when to buy: On the 61.8% Fibonacci retracement and at the 50-day. Both have provided great short-term opportunities.
But what now?
We’ll have to see how it trades, but keep the $30 mark in mind. This level has been decent support and is near where the 50-day current rests. I’d consider a partial long position near that spot. Also watch to see if IQ can clear downtrend resistance (purple line) on a rally. If so, it likely gets the stock to at least $36.
Top Stock Trades for Tomorrow #4: PayPal (PYPL)
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After missing its rally in June, PayPal (NASDAQ:PYPL) has been off my radar. That is, until it fell $10 in just a few days after reporting earnings.
We took a closer look at those earnings and found what a remarkable quarter it was. Top- and bottom-line beat, increased guidance for the third quarter and full year, and a $10 billion buyback after its $5 billion plan is complete. It’s one issue was negative cash flow, a shock for a company like PayPal.
But management clarified on the conference call and press release, saying it was due to some accounting effects and absent that, free cash flow was more than $700 million. In fact, they later said that PYPL generates 19 cents in free cash flow for each $1 in revenue. That’s great!
So why the hate? I honestly don’t know, but I do know that PayPal is a buy.
This $81 to $82 area should be viewed as support, which also includes the 100-day moving average. As a buyer, I wouldn’t get too worried about PYPL unless it closes below the 200-day. For a rally to really take hold though, PayPal needs to close above the 50-day near $85.
Top Stock Trades for Tomorrow #5: Chipotle (CMG)
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Up on good earnings and down on reports of a restaurant closure, Chipotle Mexican Grill (NYSE:CMG) has given adrenaline-junkie stock traders their money’s worth.
Longs who feel they just have to own CMG can do so as long as trend-line support holds. Conservative investors can do something else, though. Wait for Chipotle to either breakout over downtrend resistance or break below support.
From there, CMG is likely to continue in whichever direction it breaks. Above resistance and the $470s are in target. Below support gets CMG to the 100-day and perhaps to the gap at $385.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell was long AAPL and PYPL.
