We saw strong follow through in the stock market after a big “Turnaround Tuesday.” Can the market keep up the action or will we start to run into some resistance? I wouldn’t be surprised if we chop on Thursday, particularly with the jobs report coming up on Friday morning. Let’s look at some top stock trades.
Top Stock Trades for Tomorrow #1: American Eagle
On the one hand, American Eagle Outfitters (NYSE:AEO) broke out of a nasty downtrend (blue line), which took shares from $24 to $17 inside of a month, dealing AEO a ~30% blow.
That said, AEO has given up almost all of its post-earnings gains on Wednesday. Ugh. At least it’s better than GameStop (NYSE:GME), down almost 40%.
If this one can firm up over $18 to $18.50, aggressive bulls can take a shot on the long side. Otherwise, this one may be a no-touch until it can prove itself in one direction or another. Over the 20-day moving average puts $20 on the table. Below $18 puts the $17 lows on watch.
Top Stock Trades for Tomorrow #2: Shopify
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Investors who like playing chicken with an oncoming train must love trading Shopify (NASDAQ:SHOP) from the short side. As much as I wanted to talk about Roku (NASDAQ:ROKU) as it bursts over $100, this one deserves a look too.
Keep it simple: Shopify continues to holds its 20-day moving average and uptrend support. It burst over $280 resistance and short of a market-wide correction, has its eyes set on $300+. Below $280 puts the 20-day/uptrend support on watch.
Top Stock Trades for Tomorrow #3: Coca-Cola
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What a breakout we have in Coca-Cola (NYSE:KO) on Wednesday! Shares burst over $50 after a series of higher lows over the last three months.
Keep this one simple too. Stay long over $50 and consider buying on a retest.
Top Stock Trades for Tomorrow #4: Micron
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Negative news has Micron (NASDAQ:MU) slipping about 4% on Wednesday. Shares opened near the 20-day and were instantly batted down. Sometimes the news and the technicals line up a little too good.
Shares are still over short-term downtrend resistance (purple line), but below $34. The stock spent the last week or two consolidating between $32.50 and $34. Is it a compelling investment right now? Maybe. But below the former level ($32.50) and I’d look out in MU. It could bring up lower prices in a hurry.
Top Stock Trades for Tomorrow #5: Ambarella
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It sure was nice to see Ambarella (NYSE:AMBA) jump out of that bullish consolidation area between $37 and $39. But how discouraging is it to see it give up all of its post-earnings gains on Wednesday?
We can’t trust a move like this, especially given the type of market we’re in right now. If AMBA can reclaim $40, perhaps it can give its 20-day moving average another run. Above that mark puts Wednesday’s highs back on the table.
Below $39, and $37 short-term range support is back on the table. If that doesn’t hold, AMBA stock could be heading down a slippery slope.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long ROKU.
