It has been a quiet week, but stocks were on the move Wednesday after the Fed announced it would cut interest rates by 25 basis points. Let’s look at a few top stock trades going forward.
Top Stock Trades for Tomorrow #1: Roku
Roku (NASDAQ:ROKU) was by far the top focus on Wednesday, with shares falling more than 14% at one point. The fall comes despite the stock consolidating at its 20-day moving average and receiving a nice price target increase on the day. However, both Facebook (NASDAQ:FB) and Comcast (NASDAQ:CMCSA) announced over-the-top streaming products for its customers.
It seems like investors were just looking for an excuse to sell Roku. After all though, shares ran from ~$100 pre-earnings to more than $175 a month later. As if a 75% rally in one month weren’t absurd enough, shares were up almost four-fold from the December lows before that rally.
So what now?
Shares puked right down into the 50-day moving average. Is it still enough to unwind that overbought condition? We won’t know until ROKU puts in a few more sessions. Right now, it certainly looks like more losses could be on the way.
Perhaps not in the next day or two, but looking forward to the intermediate term. That said, we don’t have a crystal ball and we need to keep watch day by day.
At $120, Roku stock would be back to its gap-up post-earnings open and at the 38.2% retracement. Should we get a Q4 swoon where the market is hit hard, one could see a scenario where Roku is back down into the $100 to $110 level.
A reversal could change the tune for Roku, with bulls back in control if shares reclaim the 23.6% and the 20-day moving average. Let’s start with the 50-day and see how Roku does from there.
Top Stock Trades for Tomorrow #2: Adobe Systems
Adobe Systems (NASDAQ:ADBE) fell after reporting earnings, but held a very key spot. Support came into play from the 200-day moving average and uptrend support (blue line).
I would love to see ADBE stock reclaim the key $277 level, as well as the 20-day moving average. In this event, look for a possible rally up to the 50-day moving average.
Below Wednesday’s low is cause for concern for longs.
Top Stock Trades for Tomorrow #3: Beyond Meat
Beyond Meat (NYSE:BYND) is on the move lower after Tim Horton’s will reportedly pull BYND’s products from most of its locations.
So far though, BYND remains mostly range-bound. Below uptrend support near $145, and range support at $140 is on the table. Below that mark certainly raises a red flag for bulls, but if it holds, a rebound could be in store.
Should support hold or should Beyond not even fall to that point, look for a possible rally to range resistance near $170 and the 50-day moving average, currently near $168.
Top Stock Trades for Tomorrow #4: Bristol-Myers Squibb
After hitting a low point in July, Bristol-Myers Squibb (NYSE:BMY) stock has been slowly but surely making its way higher. Remember it’s in the midst of acquiring Celgene (NYSE:CELG) too.
In any regard, look to see if we can get a move over $50. If so, it puts a run up to $53 on the table.
On the downside, I want to see prior short-term resistance near $48 act as support. Below uptrend support and/or the 20-day moving average, and BMY may need more time to setup.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long CELG.
