After a violent decline on Wednesday, the stock market is in rebound mode this Thursday. The question is whether these gains will hold and whether we’ve put in a bottom. Traders are mixed on the indices, so let’s turn our attention to our top stock trades in individual securities.
Top Stock Trades for Tomorrow #1: Microsoft
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With strong results out of the cloud and an impressive quarterly report all around, Microsoft (NASDAQ:MSFT) is helping to lead to rebound in tech. If only Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) can help with the task.
Along with Apple (NASDAQ:AAPL), Microsoft is one of a few companies that hasn’t tested its 200-day moving average during this pullback. With Thursday’s post-earnings rally, it’s not clear if it will. Further, the $102.50 level held as support, giving short-term traders a level to shoot against on the long side.
Now over the 100-day, see how MSFT handles both the 50-day and the backside of its prior uptrend. A failure at either point would be cause for concern in the short term.
Top Stock Trades for Tomorrow #2: Amazon
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We finally got the 200-day test in Amazon, something we have been waiting for during this entire correction. Shares were up more than $120 or 7.4% on Thursday, limiting the potential upside following its results. So where does that leave us?
Well, Amazon just reported earnings and the initial reaction is not a good one. The stock is already down 6%.
On the downside, look to see if Amazon can stay above Wednesday’s lows and above the 200-day moving average. If there’s a turnaround, look to see how AMZN handles that $1,850 level. Just a few percentage points above current levels, it’s an important area.
For starters, this level has been significant in the past, as we can see dating back to July. Further, it’s where Amazon’s bounce stalled out earlier this month. Lastly, it’s the backside of its prior uptrend.
That setup is similar to Microsoft and it’s not a great sign to see prior support and uptrend acting as resistance. Let’s see if we get a rally over this mark, a rally and fail or a pullback.
Top Stock Trades for Tomorrow #3: Visa
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Visa (NYSE:V) reported solid earnings and provided guidance for fiscal 2019 that excited investors.
This stock has been in a very solid uptrend for the better part of two years. We don’t even really need trend lines. Investors have done very well buying on corrections to the 50-day and 100-day moving averages.
By most accounts the 200-day moving average should be decent support. V could overshoot this level, but as we said earlier this week, $20 off its highs and V looks attractive. Another shot down here is worth taking.
Top Stock Trades for Tomorrow #4: Twitter
One of October’s better-performing stocks, Twitter (NYSE:TWTR) is getting a big boost Thursday, up 15% on earnings. $28 really proved itself as support. However, the 200-day smacked shares down significantly.
So what now?
Basically in the middle of Thursday’s massive range, we need to see which way Twitter shares are going to break. If the market stays in rally mode, Twitter can take out its highs and perhaps run to the 100-day moving average.
On a pullback, I’d love another shot at Twitter near $28.
Top Stock Trades for Tomorrow #5: Nvidia
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From top to bottom, shares of Nvidia fell about $100 this month, marking a decline of almost 35%. That’s rather remarkable for a company growing the way Nvidia (NASDAQ:NVDA) is and a company that’s leading in so many different categories.
In any regard, seeing the stock plummet to the low-$190s before snapping back and rallying on the day is actually good news for bulls. Particularly on a day where Advanced Micro Devices (NASDAQ:AMD) plunged on earnings.
With the decline, NVDA actually went negative on the year and gave up all of its gains over the past 12 months. Bouncing now, the key will be to stay over Thursday’s low. Below that and Nvidia will fall into no man’s land. On the upside, the $250 level has become significant, which would roughly coincide with a retest of the 200-day moving average. See how it does near this mark.
However, the decline is seriously overdone for such a well-run company. What changed over the last 25 days to drive such a decline? Not much.
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.
