For the most part, the stock market hung onto most of its gains following Tuesday’s monstrous move. As we get into earnings seasons though, investors will have to fight against both market-wide volatility and giant moves in individual stocks.
With that in mind, here are our top stock trades for Thursday.
Netflix
The initial surge in Netflix (NASDAQ:NFLX) stock in after-hours trading was impressive thanks to earnings. However, Wednesday’s inability to hold onto those big gains was discouraging.
The move sort leaves Netflix floating around a bit aimlessly. On the one hand, it’s above several major moving averages, but I would have much preferred it over this $380 to $385 level. A strong close would have done a lot for the market bulls’ confidence too. Over this mark would allow a gap fill up toward $400 and pave the way to retesting its prior highs.
I’d be cautious on NFLX, especially if it takes out Wednesday’s lows and falls below the 50-day. Over the 100-day moving average and perhaps Netflix can make a run at Tuesday’s highs.
S&P 500 ETF
After looking like it was going to give back a bunch of Tuesday’s gains, the SPDR S&P 500 ETF (NYSEARCA:SPY) rallied back to flat Wednesday afternoon. Initially the ETF pulled back right off the 100-day moving average, a textbook move in this type of market. However, the $277.50 prior breakout level held as support.
So long as the SPY is above this mark and the 200-day moving average, then I am staying cautiously optimistic. A break below these marks and the recent lows are likely back on the table. If SPY can clear the 100-day, the 50-day is up next.
For short-term traders who bought over the last few days, booking some profits into the current range and up toward $282.50 might not be a bad idea. It’s a different story for long-term investors who bought on the recent dip.
Lam Research
Lam Research (NASDAQ:LRCX) is a big “tell” for others in the semiconductor space. The company beat on estimates and had a good quarter, but the reaction hasn’t been that great.
The stock is barely positive on the day despite sporting after-hour gains of more than 10%. Like NFLX, Lam Research is sort of a mixed bag. On the one hand, it’s above key downtrend resistance and the 20-day moving average. But it has a downtrending 50-day and failed at the $155 level.
I wouldn’t want to stay long a LRCX trade should it break below $145. Over that and see how it handles the $155 level again and the 50-day.
Abbott Labs
Abbott Labs (NYSE:ABT) also beat on revenue expectations and reported in-line earnings results, but is down slightly on the day. What gives?
Anyway, the results were decent and the stock is still trading really, really well. Above uptrend support (blue line) and the 50-day moving average and investors can stay long the stock. On a break below, I’d love a shot at buying ABT at $63.
Over the 20-day and ABT can retest its highs.
Caesars Entertainment
Shares of Caesars Entertainment (NYSE:CZR) spiked in morning trade as merger reports surfaced. According to reports, there’s an offer for $13 per share on the table for CZR.
Over the 50-day and 20-day moving averages is encouraging, but man, has this been a tough run. It’s been a hard year for CZR, as well as for Wynn Resorts (NASDAQ:WYNN), MGM Resorts (NYSE:MGM) and Las Vegas Sands (NYSE:LVS).
For CZR, the move thrust shares right up to downtrend resistance. Over this mark and I would feel better about being long. Currently, just below it makes me want to take profits if I’m a short-term long or take a pass for the time being.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell held no positions in any stocks mentioned.
