Stocks eked out a gain on Thursday, but it didn’t feel like a victory for the bulls. “Gut” can only take you so far, but it feels like this market wants to go lower before it goes higher. Maybe that won’t be the case and the tricky part is, one tweet from one person can change everything. Let’s look at a few top stock trades.
Top Stock Trades for Tomorrow #1: Dollar General
Click to Enlarge
We heard from the dollar stores on Thursday, leading off with Dollar General (NYSE:DG). Shares are up 7% after beating earnings, but are running into possible resistance near $126.
If prior resistance holds up, investors will want to see the 20-day and 50-day moving averages hold as support, even though that would discouragingly mean DG gives up most of its post-earnings gains. Below that is uptrend support currently near $119 and level support near $116.50.
If resistance fails and DG goes higher, look to see it push up to channel resistance.
Top Stock Trades for Tomorrow #2: Dollar Tree
Click to Enlarge
Dollar Tree (NYSE:DLTR) also reported earnings and while shares jumped 3% on poor guidance (which is great!), the overall action is discouraging in my view. At least so far. Remember when we formulated a trade in DLTR around $100? Shares ran to almost $112 in very orderly fashion.
However, it’s since fallen apart. Now what?
A rally above $100 was rejected on Thursday, so until it can clear this level, it’s a no-touch for me. Ideally though, it will also clear short-term downtrend resistance (blue line) and the 20-day moving average.
Below Thursday’s low opens up a possible test of the 200-day.
Top Stock Trades for Tomorrow #3: Apple
Click to Enlarge
Apple (NASDAQ:AAPL) has been a dud lately, as investors worry about demand and tariff implications from the trade war. It tried to break out of a falling wedge pattern on Thursday, but failed to do so.
Take careful note though, because the stock is sitting right above its 61.8% retracement at $175.20. A break below almost guarantees a test of $168 to $170 and possibly lower. A break over short-term resistance can run Apple back to the 200-day moving average. That is, assuming its 20-day doesn’t act as resistance first.
Top Stock Trades for Tomorrow #4: Veeva Systems
Click to Enlarge
Looking for a stud in a tough tape? How about Veeva Systems (NASDAQ:VEEV) after delivering a knockout quarter. VEEV hit its highest volume of the year on Thursday’s 14% rally to new highs.
Shares aren’t overbought yet and momentum just turned in bulls’ favor. Wow, that’s saying a lot, isn’t it?
VEEV gave investors a little fakeout on Wednesday ahead of earnings, breaking below the 50-day before gapping higher on Thursday. It’s now hitting channel resistance. VEEV has so much going for it on the chart, and that makes me think that maybe it can push through this trend.
But if the overall market comes under pressure, VEEV stock may have no choice but to come down too. Follow the trends that have been in place so far this year. Above uptrend resistance and it’s possible it can become a new floor of support for Veeva. Otherwise, prior trend is in play as support. A break of Wednesday’s lows would signal big trouble, but that’s a long ways off.
Top Stock Trades for Tomorrow #5: Amarin
Click to Enlarge
Amarin (NASDAQ:AMRN) stock is coming off Wednesday’s big rally, which gives investors a shot on the long side if they’re so inclined.
I wanted to look at this one yesterday, but thought I should give it one more day to see how it responds to Wednesday’s big gain. I’m glad I did, because shares are down over 4% Thursday. As long as it holds up over prior downtrend resistance (blue line), AMRN is okay on the long side.
It couldn’t hold the 50-day, which would have been preferred, but over $17 and it’s still okay. I would like AMRN on a slightly deeper dip, say down to $17.50 for a better risk/reward.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell was long AAPL.
