The Fed gave the vibe that it wouldn’t back off its rate-hiking plans come December, despite the rate-induced temper tantrum that investors threw last month. So it’s no surprise the news isn’t sitting well with investors Friday, with the Nasdaq off about 2% and the S&P 500 and Dow Jones each down about 1% apiece. There’s plenty of top stock trades that are contributed to those losses, too. Let’s look.
Top Stock Trades for Tomorrow #1: Yelp
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Shares of Yelp (NASDAQ:YELP) are being smashed on Friday, down more than 30% after coming up short on revenue. The fall sent YELP down to its lowest levels in more than a year — to $32. Although it’s at least rebounding off its lows.
The trouble is, below Friday’s high and Yelp stock is stuck in no man’s land. Over the $32.50 level and investors have a reasonable risk/reward, but this stock simply knifed through way, way too many support levels to justify buying it now. I’m going to let the dust settle a bit on Yelp.
Top Stock Trades for Tomorrow #2: Funko
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Funko (NASDAQ:FNKO) is another one getting crushed, down almost 20% after its earnings results.
Shares are now below the 50-day and 100-day moving averages, as well as its long-term uptrend line.While FNKO did break below it temporarily, it is worth pointing out that the 61.8% Fibonacci retracement level is at ~$15.64.
With Funko in no man’s land, I wouldn’t be a buyer unless it were back over its uptrend or down to its 200-day moving average. Let’s see how this one shakes out going forward.
Top Stock Trades for Tomorrow #3: Dropbox
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After beating on earnings and revenue expectations and providing better-than-expected guidance, Dropbox (NYSE:DBX) rallied to $27. It has since given up all of its gains in the session though, now barely in positive territory.
Bulls can stay long so long as DBX is above the 50-day moving average, but there’s no doubt this action is quite disappointing. Just look at the ugly action from Friday. The 100-day and the $27 to $28 area is clearly a tough level to crack.
On the plus side, DBX is no longer trapped in that big falling wedge. Let’s see if the overall market can cooperate next week and if DBX can regain some traction to the upside.
Top Stock Trades for Tomorrow #4: Disney
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Disney (NYSE:DIS) stock is up ever so slightly after the company beat on earnings and revenue estimates and had some positive commentary about the future of its business.
Keep it simple with Disney if you’re trading it. Over prior downtrend resistance and investors can stay long. Below and it becomes a show-me stock. I would like a shot at buying this name at or below $114, with a stop on a weekly close below $110.
Top Stock Trades for Tomorrow #5: Netflix
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Not reporting earnings but generally on the radar after Disney reports is Netflix (NASDAQ:NFLX). The FANG component continues to struggle, down 5% Friday.
It doesn’t help that higher interest rates are a big blow to Netflix, which continues to use debt to fuel its obnoxious content budget. Shares are down more than 20% from the highs, putting NFLX in bear market territory.
The stock continues to put in a series of lower highs (blue line) and is now finding the 200-day as resistance rather than support (as the blue circles emphasize). Watch the recent lows near $270. Ideally for bulls, the stock won’t get there. That would mean it’s starting to put in lower highs and while not out of the woods, would be constructive action.
Below $270 and $250 is on deck.
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.
