What an explosive day it was on Wall Street. Equities rocketed higher on Thursday, bursting U.S. stocks out of the choppy trading range that’s been plaguing the market for more than a month now. Let’s look at a few top stock trades going into the last day of the holiday-shortened trading week.
Top Stock Trades for Tomorrow #1: Bank of America
Bank of America (NYSE:BAC) was a top stock trade of ours last month — and for good reason. The stock was presenting an excellent risk/reward as it traded into range support near $26.25.
On Wednesday, shares cleared downtrend resistance, but were stuck at the 20-day moving average. On Thursday, BofA rallied more than 3%, gapping above the 200-day.
Shares are struggling with the 50-day moving average, but should BAC hurdle this mark, the top of the trading range, near $30.50, is on the table.
There are still risks in the market, but bulls seems to have the advantage when it comes to BAC. The MACD and RSI (blue circles) are both in bulls’ favor too. I now want to see if BAC can reclaim the 50-day and $29+ to move higher. On the downside, it would be encouraging to see BAC hold the 200-day moving average as support.
Top Stock Trades for Tomorrow #2: Twitter
Twitter (NYSE:TWTR) was a more recent top stock trade, as it failed to breakout over resistance earlier this week. However, we told investors that the setup was merely a setback, not a breakdown, as uptrend support (blue line) and the 20-day moving average held as support.
Going forward, investors need to see $43 hold as support on any notable pullback and look to see if $46+ is in the cards now that TWTR is pressing $45. Keep in mind, the high is up at $46.90.
Top Stock Trades for Tomorrow #3: Nvidia
Nvidia (NASDAQ:NVDA) and Intel (NASDAQ:INTC) are both moving well on the day, although interestingly, Advanced Micro Devices (NASDAQ:AMD) is struggling to keep up.
In any regard, Nvidia is looking to take out its July high. If it can, it puts $190+ on the table, a mark that mostly held NVDA in check in May. Above the May high at $193.06, and Nvidia may rally up to the 50% retracement for the one-year range at ~$208.
If $178 to $180 acts as resistance, see that the 20-day and 50-day moving averages, as well as uptrend support, buoys the name.
Top Stock Trades for Tomorrow #4: BlackBerry
Back in July, we called for a test of the $6.50-ish level in BlackBerry (NYSE:BB) stock. We got that over the last few weeks, giving bulls an A+ setup when it comes to risk/reward.
Now rallying, shares are running right into the 10-week moving average. When it comes to BB, keep it simple. Either BlackBerry is able to hurdle the 10-week moving average or it acts as resistance.
If it’s the former, look for a run up to multi-year downtrend resistance (blue line) and the 50-week moving average. If it’s the latter, look to see if $7 buoys the name. Should it fail, $6.60-ish is back on the table.
Top Stock Trades for Tomorrow #5: MongoDB
Shares of MongoDB (NASDAQ:MDB) are down 6% on Thursday, despite beating on earnings and revenue expectations and delivering upside guidance. Bulls must be frustrated by that one, but at least the charts are holding up.
Buyers stepped up on a test of uptrend support (blue line), and are keeping it near/above the 20-day and 50-day moving averages. Finally, staying above prior downtrend resistance (purple line) is also a silver lining.
While a rally would have been better, there were a lot of small victories to celebrate with Thursday’s action.
So what now? Below $140 and the tables turn in bears’ favor. However, if bulls can keep MDB over the 50-day moving average, they should be okay. Look to see if MDB can rally up to $165. Over it and $175+ is possible.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long NVDA and BAC.
