Bulls are starting to show their horns in the post-Christmas trading sessions. While not off to the races necessarily, the markets are trading with a bullish bias, which is good for investors. Let’s take a look at a few top stock trades.
Top Stock Trades for Tomorrow #1: General Electric
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The bad news? General Electric (NYSE:GE) stock is still trading below $8. However, the good news is that the stock has put in a higher low, a bullish development for a stock that’s trying to move higher.
Further, this stock was able to put in this formation amid an onslaught of selling earlier this week. The price action in GE is far from great, but it’s certainly encouraging. Friday’s 3% rally also put it above the 21-day moving average. So long as it’s above uptrend support (black line), I believe it can challenge the $8 level.
Top Stock Trades for Tomorrow #2: Tesla
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For as choppy and volatile as Tesla (NASDAQ:TSLA) has been, not many investors may realize that the stock has easily outperformed the major indices this quarter and is actually positive in Q4, up over 6%.
Further, it tracks its technical levels closely as well. Here on InvestorPlace, we’ve been steadfast about two levels for Tesla: $360 resistance and $300 to $310 support. The former kicked in earlier the month after what looked like a promising breakout development, while the latter showed its strength over the past few days.
Now rocketing higher on Friday, bulls want to see Tesla clear the 50-day moving average. If it can, it puts $360 back on the table.
Top Stock Trades for Tomorrow #3: Gold ETF
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Of course gold has been getting plenty of attention, given the whole flight to quality and doomsday thing we have going on right now. So let’s take a closer look the SPDR Gold ETF (NYSEARCA:GLD).
Up almost 10% from its lows this quarter, GLD is gaining some momentum. So much momentum in fact that it launched right through its 50-week and 100-week moving averages this week. That puts GLD on a collision course with the $122 to $124 level.
Not only significant due to past levels of support and resistance, but the GLD could run into resistance as it hits the backside of prior uptrend support. If I’m long, I’d be trimming profits into this area, while considering the ETF a buy on a close over $124.
On a pullback, look to see how the 200-week moving average acts as support.
Top Stock Trades for Tomorrow #4: Johnson & Johnson
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This blue-chip dividend stud has been crushed, with Johnson & Johnson (NYSE:JNJ) falling from $148 to $128 in just a few trading sessions. Is this 13.5% drop warranted and is the downside done?
I don’t know and I don’t know.
What I do know is that, warranted or not, JNJ has come under heavy fire and it’s no longer a safe-haven name to ride out the current storm in. Not to say that JNJ won’t be fine in 12 months or 12 years from now, but at the moment it’s the opposite of a stable safety play.
So that leaves a question of downside and specifically, is there more to come? I want to see how JNJ does near this $128 level. You’ll notice this area circled in green on the chart, as it buoyed the name in its first few days after the selloff. Eventually it gave way, allowing JNJ to fall to $122. Now back to $128, I want to see if this area supports JNJ or acts as resistance. If it’s the latter, $122 and the 52-week lows near $118 are on the table.
If it supports it, see how JNJ does with a test of its 200-day moving average. If it’s resistance, it still has work to do before we can go long.
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.
