We’ve got a mixed bag in retail, while airlines remain in turbulent air. That being said, the overall market did pretty well on Thursday, considering we heard from Fed Chair Jerome Powell. He finally seems to know what to say to the markets and what not to say.
With that said, let’s get a look at some top stock trades for Friday.
Down almost 20%, bulls had a chance to defend Macy’s between $26 and $27, keeping it above a pivotal level. Below this level, I want nothing to do Macy’s.
That’s causing some hesitation, but it’s clear that Target is resonating with shoppers. The stock is holding up over $65, a key level. So long as that remains the case, bulls can stay long and look for an eventual challenge of the $74 the $76 area.
Costco Wholesale (COST)
Shares of Costco Wholesale (NASDAQ:COST) are about flat on the day, outperforming the retail sector overall. However, after December’s breakdown, the stock is still under pressure even though the recent numbers — as usual — are good.
So what do investors do?
Costco is in a “best house in a bad neighborhood” situation. At least in the short-term. Between $213 and $219, there’s a decent amount of possible overhead resistance, while we have a rising wedge situation near current levels.
It’s possible for COST to push through all of these levels and challenge downtrend resistance (blue line). On a pullback, a decline to $190 is technically possible, but I want to give COST a few days to see how it shakes out. I don’t have a lot of confidence in a long setup right now, especially if retail remains weak.
Bed Bath & Beyond (BBBY)
Short of stocks like J.C. Penney (NYSE:JCP) and Sears (NASDAQ:SHLD), not many retailers have been worse than Bed Bath & Beyond (NYSE:BBBY). That’s not stopping shares from popping 14% on the day though, after the company beat on earnings expectations and provided a better-than-expected outlook.
Shares are ramming right into the backside of downtrend support (blue line). Can it push though? Maybe, after a move like this. Should shares fail to push through resistance, look to see if they hold up near $13. If they do get through resistance, look for BBBY to rally to the 200-day moving average.
American Airlines (AAL)
American Airlines (NYSE:AAL) took a dive earlier this month after Delta Air Lines (NYSE:DAL) issued worse-than-expected guidance. However, the stock held $30 on the downside, its lows over the past few months.
Then American slashed its guidance on Thursday, sending shares lower once again. Initially back down to $30, AAL has made up roughly half the day’s losses. If it can push higher, this low should hold once again. In 2018, we highlighted AAL as one of the cheapest in the industry and with some of the best growth. Even after the guidance cut, that remains true for American Airlines and may very well draw in some buyers.
That said, should AAL lose $30, I wouldn’t want to stick around. The trend is clearly lower, but if $30 holds, bulls may be all right. That said, the news isn’t great and it’s hard to see what catalysts will push the industry higher in the short term.