U.S. stocks started off higher on the day, but failed to hold most of the gains. It leaves market-wide volatility elevated as investors continue trying to digest a bevy of news. Let’s look at a few top stock trades as we approach the weekend.
Top Stock Trades for Tomorrow No. 1: Amazon
Like we covered with Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) earlier this week, Amazon (NASDAQ:AMZN) is perched in a precarious spot.
AMZN currently has uptrend support (blue line) at $1,770, just below current levels, the 200-day moving average at $1,752 and the 38.2% retracement at $1,766. It’s also at former fourth-quarter resistance.
Buyers who believe Amazon has upside can buy near current levels, stepping out on a move below the 200-day moving average. If it holds, upside targets include the 20-day moving average at $1,846 and the 50-day moving average at $1,899.
Should support fail, look to see if AMZN finds support at the 50% retracement at $1,679 and the 61.8% retracement at $1,591.
Top Stock Trades for Tomorrow No. 2: General Electric (GE)
General Electric (NYSE:GE) are getting crushed on Thursday, falling more than 11% to its lowest levels since early January.
We have been all over GE stock this year, looking for a breakout over $10.50 to $10.70. Vital support at $9 gave way, as did the 61.8% retracement and the 200-day moving average near $9.25.
Bulls need to stand aside until GE finds its footing now. Will that be at $7.50? How about $6.50? In between or somewhere even lower?
There’s too many questions to know the answer. What we do know is that $9 is likely to be resistance on the way back up.
Top Stock Trades for Tomorrow No. 3: Alibaba (BABA)
Alibaba (NYSE:BABA) is forming a long-term wedge, with a series of higher lows and lower highs (blue lines). $170 has proven notable, and it’s also the 38.2% retracement.
Shares opened near $170 and have been retreating ever since, even after a solid quarterly result.
BABA stock is sitting near $165, resting on the 200-day moving average. If it holds, look for a rebound up to downtrend resistance (blue line). Over there, it could trigger a move to $180-plus.
If it gives way, look for a drop down to uptrend support and the 61.8% retracement near $155. Falling below there opens up the door to $150 and, if that fails, BABA could be in trouble.
Top Stock Trades for Tomorrow No. 4: GrubHub (GRUB)
Man, I do not like shares of GrubHub (NASDAQ:GRUB), and the decline from the July highs highlights why.
Had support near $60 held, GRUB might have been a worthwhile long with decent risk/reward. Downtrend support (blue line) gave way on Wednesday, paving the way for Thursday’s losses.
A move back over $60 could kickstart a rally back to $65 and possibly higher. The concern for bulls now? $60 becomes resistance, increasing the downside potential significantly. Watch $60. It may be key in the coming sessions.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long AMZN and GOOGL.
