Investors continue to digest the Federal Reserve’s rate cut, while trying to price in trade-war risks and a recession in Hong Kong. Further, we continue to get a plethora of earnings reports. Let’s look at a few top stock trades.
Top Stock Trades for Tomorrow No. 1: Starbucks (SBUX)
Starbucks (NASDAQ:SBUX) opened higher Thursday, after beating on earnings and revenue estimates. However, the stock gave back all of its gains and then some on the day.
Starbucks is on the verge of putting in a bearish engulfing candle on the daily chart, which obviously does not imply good things for bulls.
However, reprieve may be on the way. The monthly low at $82.13, as well as the 200-day moving average at $81.26 and the 61.8% retracement at $81.90 could all act as support for SBUX.
The 200-day should at least be good for a bounce. If not, SBUX is certainly in trouble and could be looking at lower prices.
Top Stock Trades for Tomorrow No. 2: Twilio (TWLO)
There’s a reason I have not become all that bullish on Twilio (NYSE:TWLO) and other high-growth stocks despite being bullish on their long-term businesses. That reason is the technicals, which remain quite unattractive.
I did nibble some Twilio in Wednesday’s after-hours session, after the company reported earnings. I have said before that I like to get reacquainted with these stocks once they are down 40%, which was the case with TWLO when it was near $90 last night.
That said, that doesn’t mean I don’t believe more downside may not be on the way. Should it continue lower, see if the 23.6% retracement can support the stock. If not, $80 to $85 could be on the table.
On the upside, bulls first needs to see TWLO stock reclaim the $100 mark, a key support and psychological level. After that, it needs to break out over downtrend resistance (blue line) and reclaim its 50-day moving average.
Until the bulls make some progress on the charts, these stocks are likely to continue struggling.
Top Stock Trades for Tomorrow No. 3: Lyft (LYFT)
Like the first two stocks, Lyft (NASDAQ:LYFT) is struggling on earnings.
Some may be wondering about the coverage for Facebook (NASDAQ:FB) and Apple (NASDAQ:AAPL), since they also reported earnings. However, the pre-earnings game-plans we laid out ahead of time are still in effect. Apple needs to take out its highs, while Facebook needs to hold its breakout level over $190.
As for Lyft stock, this chart just can’t catch a break. After opening above the key $44 level and the 50-day moving average, Lyft failed to hold these marks and tumbled lower. The stock is putting in a bearish engulfing candle, which could imply more downside is to come.
On the downside, see if $40 holds. Falling below that puts the October lows near $37 on the table. On the upside, bulls need to see Lyft clear $45 and take out its post-earnings high.
Top Stock Trades for Tomorrow No. 4: Pinterest (PINS)
Pinterest (NYSE:PINS) fell several percent ahead of its earnings report after the close.
Shares continue to put in a series of lower highs, while support has been steady around $25. I am long PINS for the long term, but fully admit the charts look unattractive.
Should the pattern resolve lower, look to see if the post-IPO lows near $23 hold. Below could kickstart more selling pressure. Over downtrend resistance and the 23.6% retracement, and perhaps a move up to about $28.50 is possible. There it will find the 50-day and 100-day moving averages, as well as the 38.2% retracement.
Top Stock Trades for Tomorrow No. 5: World Wrestling Entertainment (WWE)
World Wrestling Entertainment (NYSE:WWE) was hammered on Thursday, down about 17% on earnings.
The move thrust WWE through long-term support, as well as the November 2018 lows near $58.13. You’ll notice then that the 50-week moving average supported the stock. In fact, this mark used to be support (green arrows), before turning to resistance (red arrows) in Q2 2019.
That foreshadowed this big move lower. On the upside, WWE needs to reclaim $58, and eventually retest $65 and downtrend resistance (blue line). I’m not sure if shares will work all the way down to the 200-week moving average near $43, but it’s on the table.