They don’t call it “Turnaround Tuesday” for nothing. Small caps jumped 1%, while the Nasdaq and S&P 500 each rallied about 70 basis points. What does that do for our top trades?
Top Trades for Tomorrow #1: Huya
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After a heroic run from $12 to $50, Huya (NYSE:HUYA) has had trouble gaining traction to the upside. Until Tuesday, it was holding over support near $30.
Support gave way though, as HUYA fell 15% Tuesday after the company reported earnings. Huya beat on revenue estimates and met earnings expectations. However, third-quarter revenue guidance came up a bit short.
What now?
As we said, below $30 is not bullish and $25 is certainly in the cards now that Huya is below its July lows. Should it recover, look for downtrend resistance to come into play. Above this and its moving averages, and HUYA could regain some mojo.
Top Trades for Tomorrow #2: JD.com
A stock with zero mojo right now? JD.com (NASDAQ:JD).
Now below key support, traders should leave this one alone. Honestly, JD is setting up as a solid short right now, if earnings weren’t on deck Thursday morning.
From a trading perspective, I don’t want to buy JD unless it’s back above this key trend support or down near $30. On a rebound, look to see how JD handles $36.
Top Trades for Tomorrow #3: ZTO Express
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Volatility continues to run rampant in the Chinese stocks. ZTO Express (NYSE:ZTO) is no exception, with shares falling about 10% Tuesday. The stock remains range bound, which is frustrating for investors and good for traders.
Those who want a low-risk long can consider buying ZTO near current levels. I would not suggest being long ZTO below $18.50. That would put ZTO below its range lows as well as below the 100-day moving average. On a rebound, traders can target the 50-day at $20.50 and the top of the range at $21.50.
Top Trades for Tomorrow #4: Home Depot
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What a poor reaction to a great earnings result from Home Depot (NYSE:HD). The company beat on earnings and revenue expectations, while comp-store sales surged 8%. Maybe some investors were worried about margins, but HD continues to do great in my view.
With that, shares fell in the session before recovering the losses and finishing near flat. I would be an interested buyer of HD near $190.
For starters, a form of level support should come into play near this mark, as should the 100-day moving average at $189. On a slightly farther decline, the 200-day sits at $185 while uptrend support sits between the two key moving averages. Unless the pullback happens tomorrow, those figures should continue trending higher.
The story changes if HD falls below uptrend support and the 200-day, but until that happens, HD remains bullish.
Top Trades for Tomorrow #5: Nvidia
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As long as the overall market holds up, it looks like Nvidia (NASDAQ:NVDA) will run higher into earnings. The company will report on Thursday after the close. (Here’s a preview).
Traders can play that run-up and even though I’m quite bullish on Nvidia, it’s hard for me to buy a stock into its highs with the quarter on deck. Again, I think the report will be fine, but discipline rules.
Nvidia could run up to the $265 to $270 mark without an issue. Post-earnings upside could push shares into the $280 to $285 range, the top of previous channel resistance. On a potential post-earnings pullback, look for support in the $240 to $245 range.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long NVDA.
