Stocks were stagnant in the first trading session of a holiday-shortened week, as U.S. stock started off higher at the open and fell flat in afternoon trading. It’s left traders craving some sort of break — either higher or lower — in order to get a better trading environment. Let’s look at a few top stock trades for Wednesday.
Top Stock Trades for Tomorrow #1: Gilead Sciences
Click to EnlargeOn Tuesday, Gilead Sciences (NASDAQ:GILD) was downgraded to a sell by Goldman Sachs, sending shares lower by 3.75%. It thrust the stock below uptrend support (black line), as well as the 20-day and 50-day moving averages.
Now what? A rally back to the $65 to $66 area and fail would set up shorts to push GILD stock lower. Should it continue falling, the $61 to $61.50 area could be next.
Top Stock Trades for Tomorrow #2: Advanced Micro Devices
Advanced Micro Devices (NASDAQ:AMD) erupted on positive news for its new chip, sending shares higher by 10%. It broke the stock out of a multi-month downward channel, and put it over the 20-day and 50-day moving averages.
It also put AMD over $29, a level we were watching on the upside not all that long ago.
If AMD can take out April’s high at $29.95, a rally into the low-$30s is possible. On a pullback below $29, look to see that prior channel resistance holds as support, and/or the 50-day/20-day moving average, whichever comes first.
Top Stock Trades for Tomorrow #3: Teva Pharmaceutical
Shares of Teva Pharmaceutical (NYSE:TEVA) are tumbling more than 12% on Tuesday, as the stock breaks to new multi-year lows. The stock blew through the 2017 lows earlier this month and continues to look downright dreadful.
A rally back to the $11 to $11.50 area and fail would set up a short signal for bears. At this point, there’s not much reason to get long TEVA, unless aggressive traders want to go long against Tuesday’s lows. That said, I would rather wait for some kind of reversal to brew in TEVA first.
In August 2017 we called Teva toxic and not much has changed at this point.
Top Stock Trades for Tomorrow #4: American Airlines
American Airlines (NYSE:AAL) is also off to a tough start. The stock has been putting in a series of higher lows and while a bounce from March sent the stock higher by about $5 from peak to trough, we’re right back where we started. Actually, we’re worse now.
Over the last few days, AAL has lost the vital $30 support floor that has led to numerous bounces in the past. Investors can play these bounces even into the face of a downtrend (purple line). However, they have to know when to step aside once support gives way.
Shares have now broken below this year’s lows, making a rally back $30 suspect. Should it act as resistance, expect sellers to push it back down for another test of the lows.
Top Stock Trades for Tomorrow #5: Nvidia
Nvidia (NASDAQ:NVDA) has been getting buried lately, shedding more than 25% from its highs last month. This $144 to $145 area acted as support twice in February before sending NVDA up to $190.
Now stuck in a falling wedge, this could have a bullish break if and when it clears resistance. If it does, a breakout could send NVDA up to its 20-day moving average.
Of course, a break of support negates that move.