The stock market gave bulls a little reprieve on Wednesday, rallying slightly on optimism over a potential trade deal. However, there have been some stocks that have shown relative strength over the past few days compared to the broader market. There are also strong names that are barely down compared to their peers. What are they? Let’s look at some top stock trades that have been holding up.
Top Stock Trades for Tomorrow #1: Microsoft
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A very orderly pullback has occurred in Microsoft (NASDAQ:MSFT). For two straight sessions, MSFT stock has tested and held the 20-day moving average. I like simple setups and this one is simple.
A break below Tuesday’s low can stop short-term bulls out, who can look to get long again near $121 and/or the 50-day moving average. A bounce back to $130 could be in the cards if the 20-day holds up.
Top Stock Trades for Tomorrow #2: JPMorgan
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After a strong reaction to earnings last month, JPMorgan (NYSE:JPM) stock has been surprisingly resilient over the last few weeks and days. The pullback is very similar to MSFT, in that the 20-day moving average continues to hold as support.
A break below $110 could trigger a move to fill the gap back near $107. With the 50-day and 200-day moving average in this area, as well as prior resistance near $106, I would feel comfortable nibbling JPM for a longer-term position down near this level.
Top Stock Trades for Tomorrow #3: Okta
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Now let’s look at some stocks with relative strength. That is, the ones that are outperforming at a time where the market is under pressure. Watching these names are very important, because they are usually the ones that perform the best when the market snaps back and begins to rally. Take note of that (just like you should take note of the chart for Realty Income (NYSE:O)).
If you only looked at Okta (NASDAQ:OKTA) this week, you probably wouldn’t even know there was a selloff in the stock market. Shares continue to trend higher and so long as it maintains the 20-day moving average, it will likely continue that trend. I’m a buyer on a pullback into the 20-day.
So long as it maintains $100 in the short-term, $110 is doable. As always though, know your timeframe and risk tolerance.
Top Stock Trades for Tomorrow #4: Starbucks
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Like Okta, Starbucks (NASDAQ:SBUX) is showing no signs of stress. In fact, the stock is making a brand new high on Wednesday. Eventually these trends will end, but at a time where the market is under pressure, now is not the time to bail on SBUX.
Bulls can stay long against the 20-day moving average. A break below will cause short-term investors to consider locking in some gains, but over $76 and Starbucks still looks good.
Top Stock Trades for Tomorrow #5: Chipotle
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Chipotle (NYSE:CMG) pulled back a few weeks ago, but has been strong all week while the overall market has been under pressured.
Amid its selloff, CMG just touched its 50-day and maintained uptrend support (blue line). The setup is simple here, too. A breakout over $720 triggers more gains. A break the 20-day and uptrend support likely summons another test of the 50-day.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long SBUX.
