Dovish commentary from the Federal Reserve gave stocks a jolt on Wednesday, sending all the major moving average higher on the day. With the Fed possibly being removed as an obstacle, investors still have to see how the trade war negotiations go with China at the G20 summit. Still, the mood is improving on Wall Street, and we can see that in our top stock trades.
Top Stock Trades for Tomorrow #1: Alphabet
That breaks Alphabet out of its discouraging downtrend and also puts it above the 21-day moving average. Our buy call near $1,010 worked out great from just a week ago.
Should GOOGL continue higher, it will have to contend with its 50-day moving average next. If shares pause, look to see if support comes in from the 21-day. The market (and GOOGL) won’t repair overnight, but these are some encouraging signs.
Top Stock Trades for Tomorrow #2: Russell 2000 ETF
The iShares Russell 2000 ETF (NYSEARCA:IWM) was a leader during the decline and so investors are going to look for it as a leader if and when the rally does come. While the IWM lagged the Nasdaq on Wednesday, its ~2.5% rally was nothing to scoff at.
We’ll have to see how $152 treats the IWM through the rest of the week. If the IWM can close above it though, it will pave the way for a run up to the 50-day. The higher low (as seen by uptrend support in blue) is an encouraging sign for the bulls.
Let’s see if they can keep up the momentum. If the trade war sees progress, stocks have upside into year-end.
Top Stock Trades for Tomorrow #3: Tiffany & Co.
Investors can look to see if this $92 level will hold, the low from April. If not, expect a decline down into the high-$80s, the stock’s low from last November. How fitting. From there, see if it firms up. If so, a rebound to the backside of prior downtrend support could be in play.
Top Stock Trades for Tomorrow #4: Celgene
I’m seeing a lot of similar setups in individual stocks and ETFs right now. One is like the IWM above, where the stock is still in a downtrend, but is putting in a lower high and gearing up to challenge resistance. The other setup is like the one we have in Celgene (NASDAQ:CELG), which is breaking over downtrend resistance after a steep decline.
In the case of CELG, investors have a low-risk opportunity. A close below downtrend resistance and investors can bail on their position. However, if CELG can hold up above this mark and push through its 21-day moving average, a test of the $76 level isn’t out of the cards.
Keep in mind this name was at $92 eight weeks ago and trades at roughly 8 times this year’s earnings and less than 7 times 2019 estimates.
Top Stock Trades for Tomorrow #5: Micron
I am definitely skeptical of Micron (NASDAQ:MU) in the short term, but like CELG, this is another low-valuation name trying to move higher. The only difference is, Micron hasn’t broken out of its downtrend yet.
This is one to simply keep on the radar. If it’s able to breakout over downtrend resistance and preferably over the 50-day moving average, a run back to $46 wouldn’t be out of the cards over a longer timeframe swing trade.