The Federal Reserve released its Minutes statement from its previous meeting, concluding that some members are open to a “modest” rate hike later this year if the economy warrants it. The market is up modestly on the day, but Thursday’s action will be more telling. Let’s look at some top stock trades to see how we’re setting up.
Top Stock Trades for Tomorrow #1: Delta
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Shares of Delta Air Lines (NYSE:DAL) are higher by 2% on Wednesday after the company beat on earnings and revenue expectations.
However, after rallying to $59, shares promptly lost altitude. So far the stock is holding the recent lows near $57. Below its post-earnings range and DAL may be heading for its 20-day moving average. Keep in mind, the stock was already overbought coming into these somewhat expect results after DAL’s outlook increase earlier this month.
Look for a tradeable breakout over $59 or a pullback into this $54 to $55 region.
Top Stock Trades for Tomorrow #2: Nike
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Nike (NYSE:NKE) fell from ~$88 to a low of $81 in two days after reporting earnings. However, it quickly bounced and reclaimed its 50-day moving average. All is well for the bulls, right?
Well, not so fast.
While still above the 50-day and 20-day moving averages, NKE stock is clinging to them desperately for support. With Friday’s gap up and pullback, NKE stock secured a higher low, a bearish technical development.
If Nike loses the 50-day and $84, look for a potential retest of its post-earnings lows and perhaps even the 200-day moving average. Over $86 negates the lower high and puts $88 back on the table.
Top Stock Trades for Tomorrow #3: Salesforce
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This one has been quietly chopping sideways for the last 10 weeks or so, with Salesforce (NYSE:CRM) starting to coil into a relatively tight range over the past month. Which way will it break?
I have no idea, but we can look at where it might go once it does. With Wednesday’s rally, CRM reclaimed its 50-day and 20-day moving averages, while one more strong day may put it over downtrend resistance. If that’s the case, a run to $165 is possible.
On the downside, a break of uptrend support could send it to $152.50.
Top Stock Trades for Tomorrow #4: Advanced Micro Devices
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This one has been a great buy-the-dip name and originally, we wanted to wait for a retest of the 20-day moving average on Advanced Micro Devices (NASDAQ:AMD).
I still like the idea of buying AMD into the 20-day and uptrend support. But that said, we have had a nice multi-day pullback here, AMD has worked off its overbought condition and it’s putting together an inside day on Wednesday.
Aggressive bulls could justify a position here with a stop-loss on a close below the 20-day or $26, if they’re comfortable with that wide of a range. They can also consider using the latter stop-loss and trading with smaller size to accommodate the larger potential loss.
If support holds, a run to $30 is on the table. If support gives way, look to see that $25 and the 50-day holds as support.
Top Stock Trades for Tomorrow #5: Lyft
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Another disastrous day for Lyft (NASDAQ:LYFT) takes hold, with shares falling almost 9%. This is the last thing investment bankers wanted to see with a slew of IPOs still in the pipeline. They had to get this one right and they’ve butchered it thus far.
With Wednesday’s fall, Lyft stock took out the lows near $66 that came on day three of trading. Bulls can try to play a long position on Lyft if it reclaims this spot, but honestly, it’s too volatile and too choppy for me.
I would avoid Lyft and look for better opportunities out there. There are plenty.
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.
