Major U.S. indices continue to hover within a percent of their all-time highs. That’s despite the potential August volatility and the ongoing trade war with China. Will equities persevere for even more gains? Let’s look at our top stock trades to find out.
Top Stock Trades for Tomorrow #1: Snap (SNAP)
Despite beating on earnings and revenue expectations, shares of Snap are down more than 5% Wednesday. The action isn’t surprising given Facebook (NASDAQ:FB) and Twitter (NYSE:TWTR). Shares were up 10% in after-hours trading, but the app redesign and decline in daily active users is keeping investors away.
I still don’t like Snap, but was willing to turn bullish if shares reacted well to the report. They didn’t though and thus I still don’t like the stock.
Those who do though can go long with a stop-loss on a close below $12. That’s Wednesday’s low and provided a short-term bottom to Snap earlier this month. Below $12 and nothing stops Snap from declining to its all-time lows near $10.50.
Roku (NASDAQ:ROKU) will report earnings after the close on August 8th. Like Snap, this is not a buy-or-sell recommendation. It’s a know-your-levels guide.
So what do we have? Although wide, this whole $48 to $52 area has been acting as a form of resistance. If investors buy up Roku on its results, look to see if it can clear this area. It would require a rally of 8% to 10%. A smaller rally gets ROKU over $50, which would also be a plus.
At the very least for me to be bullish, I need Roku stock back over its prior uptrend (purple line). Should shares really bite the dust, $40 should be support. This would be a tough 15% fall, but the 200-day would also come into play.
Top Stock Trades for Tomorrow #3: Weight Watchers (WTW)
Weight Watchers (NYSE:WTW) beat on earnings and revenue, had record Q2 subs, reported a near 10% jump in gross margins, a 50% jump in earnings and raised its full-year outlook suggesting it could roughly double its earnings from 2017.
And shares tanked.
Down a few percent again on Wednesday put WTW right near a solid buy zone. A rally back into the upper-$80s seems reasonable, given that WTW trades at just 24 times this year’s earnings despite these massive growth numbers. A handful of analysts — even the one with a hold rating — have published a slew of new price targets starting at $100 and going much higher.
So subs were down from Q1 to Q2, big deal. Management said that’s seasonal and what is expected. WTW didn’t deserve to lose that much weight — sorry! — and Wall Street is realizing that.
InvestorPlace readers have made a killing in Bank of America (NYSE:BAC) after we highlighted the breakout-buy back in July.
Shares again pushed higher on Wednesday, making new multi-month highs. So what now? Buyers are still stepping in and that bodes well for those that have been long. While some investors are talking about resistance at $32, I’d focus more on the $32.25 to $32.50 area.
There’s a lot of “candle wicks” in this range and BAC has had trouble maintaining those levels despite its strong catalysts. As shares stretch into overbought, I’d be looking to book some profits rather than add to my position if and when we get there.
Top Stock Trades for Tomorrow #5: Weibo (WB)
In short, Weibo (NASDAQ:WB) is looking ugly Wednesday. While WB is down just 4% despite a top and bottom line earnings beat, it’s off big-time from its highs.
Shares hit a brick wall near $90 and quickly fell to about $80. Now a decline to at least $75 is in the cards, the bottom of its recent trading range. WB is also below all three major moving averages.
For it to be bullish, WB really needs to breakout out of this channel.