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5 Top Stock Trades for Wednesday — Buy Nike and Sonos?

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

By Bret Kenwell, InvestorPlace Contributor

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Tech stocks powered higher Tuesday, pulling the overall market higher and adding to Monday’s meek bounce following a tough week of trading last week. As always though, the session was filled with big movers in both directions. Let’s look at what’s atop our list of top stock trades.

Top Stock Trades for Tomorrow #1: Sonos

top stock trades for SONO

The recent IPO of Sonos (NASDAQ:SONO) was going pretty good and shares were trading well heading into earnings. Then the company reported on Monday after the close, causing shares to fall 22% on Tuesday.

Is it time to buy?

While uptrend support was working great, the rally ahead of earnings surely trapped a lot of buyers after it gapped down by such a large amount. Admittedly, I would have rather bought on a test-and-hold of uptrend support. However, this $16.50 to $16.75 area has been decent support that tempted investors could buy into.

If this support fails, look for a test of the lows near $15.50. If that doesn’t hold, a retest of the $15 IPO will likely be next. On the upside, a retest of uptrend support near $18.50 could act as resistance. Above that and a gap fill will likely be sold into (at least the first time) as trapped bulls exit their position.

Top Stock Trades for Tomorrow #2: Nike

top stock trades for NKE

Shares of Nike (NYSE:NKE) came within a dime of hitting new all-time highs on Tuesday. As of now, the company and the stock aren’t paying dearly for the Colin Kaepernick backlash.

In fact, the stock is doing great. It continues to bounce along uptrend support and the 50-day moving average. Interested investors should wait for that setup again, and play that trend until it fails.

For InvestorPlace readers though, they’ve already taken advantage.

Top Stock Trades for Tomorrow #3: Activision Blizzard

top stock trades for ATVI

$78 is a notable level in Activision Blizzard (NASDAQ:ATVI), which also has uptrend support helping to slowly-but-surely push shares higher.

Tuesday’s move vaulted ATVI over downtrend resistance (blue line) as well as the 50-day moving average. New buyers can stay long so long as ATVI is above $78. A long-term bull should feel comfortable with ATVI over $75 and the 50-day moving average.

Conservative buyers may want to see if we get a test of the 200-day, perhaps in a large, market-wide correction. That has been a good long-term buy for ATVI.

Top Stock Trades for Tomorrow #4: Home Depot

top stock trades for HD

We witnessed excellent price action in Home Depot (NYSE:HD) this week. Like Nike though, InvestorPlace readers were in prime position for this one.

Last week, when HD peeked over the $202.50 mark, we said to watch how this one trades. If this level holds, it’s a low-risk buy. And held it did, highlighted by the blue box on the chart.

Shares are now knocking on the door of $215 and short-term bulls can consider pocketing the more than $10 per share they hold in profit. With an RSI approaching $80, and after such a large, short-term move, booking some profits may be wise.

Top Stock Trades for Tomorrow #5: Funko

top stock trades for FNKO

Last month we got behind Funko (NASDAQ:FNKO), saying it is a buy when it retests the 20-day moving average. It did a few days later and went on to rally 55%.

After hitting $31, shares are pulling back in a meaningful way. That gives investors who missed the train a chance to buy again, should it retest and hold the 20-day moving average. If it fails as support, investors can stop-out with minimal losses and wait for a better setup. In general — and especially with Funko — remember to keep it simple.

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/2018/09/5-top-stock-trades-for-wednesday-sono-fnko-hd-nke-atvi/.

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