Stocks again came under pressure amid political concerns in early Thursday trading, but were able to bounce from the lows in the afternoon. Here are a few top stock trades to watch going into Friday.
Top Stock Trades for Tomorrow #1: Micron
Micron (NASDAQ:MU) will report after the close on Thursday, and it’s an encouraging sign to see the stock come in ahead of the report. Many analysts believe that the company is near a trough and if it is, we should see it reflected in the stock price after earnings.
Know you’re levels after the report. On a rally, I’m looking to see if MU stock can close north of the $51 mark, a level of resistance this month.
On a decline, see if it holds the 78.6% retracement and 50-day moving average. If not, a decline down to former resistance between $44 to $45 is in the cards. Below this mark is very discouraging.
Keep in mind, MU can have a big impact on semiconductor and memory stocks.
Top Stock Trades for Tomorrow #2: Bitcoin
The action in bitcoin has not been pretty, but at least InvestorPlace readers were ready for it. Last week, we highlighted the descending triangle pattern above, asking whether support would hold and send bitcoin higher for a potential breakout or if it would fail and cause a breakdown.
The only thing is, I didn’t expect it to drop to the 200-day moving average so fast!
Well, here we are, and after a weak bounce attempt on Wednesday, bitcoin took out its recent lows on Thursday.
Now investors have to see whether the $7,500 level buoys bitcoin or if it will continue lower to its 38.2% retracement near $7,231. On the upside, see if the 200-day moving average acts as resistance. Over Wednesday’s high could trigger a move back to prior support near $9,366.
Some investors use the Grayscale Bitcoin Trust (OTCMKTS:GBTC) to trade bitcoin, although it’s not a direct comp.
Top Stock Trades for Tomorrow #3: Biotech ETF
There has been decent support near $100 for the past year, but shares are starting to break below it now. IBB is below all of its major moving averages — which are trending lower, by the way — while downtrend resistance (blue line) forces a series of lower highs.
The stock temporarily took out its May low at $99.69, and a close below this mark would be another bearish development.
A move lower could take the IBB to the 78.6% retracement at $96.28. Below that and the December lows are a possibility. On the upside, I would like to see the IBB close over $106. That puts it over all of its major moving averages, downtrend resistance and the 50% retracement at $105.99.
Top Stock Trades for Tomorrow #4: Starbucks
Once a stock-market darling, Starbucks (NASDAQ:SBUX) is no longer a relative strength leader.
Identifying relative strength leaders can be quite valuable. Not just because it can lead to gains amid tough trading environments, but because these stocks often do quite well once the dust settles.
In the case of SBUX, we were looking for uptrend support (blue line) to break SBUX out over resistance (black line) less than a month ago. In other words, it was forming an ascending triangle, a bullish setup. Since support gave way, we have the opposite setup taking place: a descending triangle, which is a bearish setup.
If SBUX stock loses the $89 mark — and keep in mind the 78.6% retracement is at $89.57 — then selling pressure could mount.
The first stop is the 100-day moving average currently near $88. Below that and we could hit an “air pocket,” without much notable support until the $82 to $82.50 area. The 61.8% comes into play at $81.90, while the 200-day isn’t all that far off.
On the upside, a move $92 could send SBUX back to its 50-day.