The S&P 500 and Dow Jones hit new all-time highs on Thursday as U.S. equities continued to churn higher. That doesn’t mean every stock’s enjoying a day in the sun though. We also have some big earnings trades on list of top stock trades for tomorrow.
Top Stock Trades for Tomorrow #1: Micron
Micron (NASDAQ:MU) will report earnings after the close today. So knowing where its levels are is very important.
This $45-ish area has been notable so far in 2018. After a snap-back rally from $41 to $47.50, investors are backing off heading into the close. Plus, MU is running right into the 20-day moving average.
So where does that leave us? It would be notable if Micron was able to stay over $44 to $45 post-earnings. Keep in mind this name tends to rally, then fade, after reporting its results. That doesn’t mean it’s guaranteed, but watch for this pattern on Friday.
Given that Micron trades at less than 4 times earnings — yes, 4 times! — I wouldn’t be surprised to see a pop to $50 that gets hit by sellers. That will put MU near downtrend resistance, as well as the 50-day and 200-day moving average.
That said, a close over those levels — call it over $50.50 or $51 — and MU looks good on the long side. If it declines, look to see how the $37 to $38 level holds up, if it gets there. That puts Micron at 3 times earnings and near long-term support.
Top Stock Trades for Tomorrow #2: General Electric
The move over $12.50 and downtrend resistance was very encouraging and gave aggressive bulls a tempting risk/reward. However, we didn’t like the lack of big volume and a strong reversal to mark the potential bottom.
Another bearish report from the dead-accurate Stephen Tusa out of JPMorgan is hitting the stock Thursday. It’s now back below trend-line resistance and right near that key $12.50 mark. Break that line in the sand and the $12 lows are back on the table.
Below that and GE is in no man’s land. There’s nothing wrong with conservative nibbles — such as buying the close over downtrend resistance earlier this week. But don’t be a hero with GE and keep your losses small. It’s not worth the risk.
Top Stock Trades for Tomorrow #3: Stitch Fix
Knifing through the 20-day moving average, it looks like Stitch Fix (NASDAQ:SFIX) has its eyes on the 50-day.
However, it’s hitting a steep uptrend (purple line) and finding some support. Given the meteoric rise of SFIX, that uptrend may not be strongest level of support. If it gives way, look for a tag of the 50-day and possibly a less-steep uptrend line near $34 (blue line).
Let’s first see how it finishes out the week. Then we’ll have a better idea of what support level may hold and which will not.
Top Stock Trades for Tomorrow #4: iQiyi
Let’s end the column with a few Chinese stocks. iQiyi (NASDAQ:IQ), oft called the Netflix (NASDAQ:NFLX) of China, has had trouble digesting its massive move from sub-$20 to almost $50 in about five weeks time.
However, IQ is finally starting to base, albeit slowly. Shares are putting in a series of higher lows, and broke through a steep level of downtrend resistance about a month ago.
IQ isn’t out of the woods yet, as it hasn’t been able to push through the 50-day or above a shorter-term downtrend (blue line). Those levels sit up near $31. If IQ can close above that mark, it may leave its troubles behind it.
One note? The stock has a 125 million share lockup expiration next week, on September 25th. Given that the stock is up more than 50% from its $18 IPO, there could be sellers.
Top Stock Trades for Tomorrow #5: Sogou
It’s a tough task to ask Sogou (NYSE:SOGO) to rally through downtrend resistance, level resistance near $8 to $8.10 and the 20-day moving average all in one day.
But Sogo closing above $8 on Thursday is an impressive feat in my view. Although off its session highs, it’s clear this one wants to go higher. It’s just a matter of whether the sentiment in Chinese tech stocks will keep it down.
Still, Thursday’s action is impressive and investors should keep it on their radar. Even a small rally and close over these resistance levels could make Sogo an attractive risk/return long.