More new highs were in store for the S&P 500 on Tuesday. Let’s look at a few top stock trades from the day, some of which helped fuel the market’s push higher.
Top Stock Trades for Tomorrow No. 1: General Motors (GM)
The stock continues to put in a series of higher lows (blue line), but has been struggling to clear the $39 to $40 area so far this year.
If GM is able to hurdle the congestion in that zone, a run into the low-$40s could be on the table. Should GM again fail to penetrate this area though, lower prices could be in store. Specifically, watch the 38.2% retracement for the one-year range near $37.50. Below that puts the 50-week and 100-week moving averages in play, which puts $34 to $35 in play.
Below the 100-week moving average and investors should be cautious.
Top Stock Trades for Tomorrow No. 2: Apple (AAPL)Apple (NASDAQ:AAPL) hit new highs in Tuesday’s trading session before reversing lower. My concern with Apple has been the big pre-earnings rally we’ve seen this month.
When the stock pulled back at the beginning of October, former $215 resistance held as support and AAPL snapped right back into gear. InvestorPlace readers remember that day quite well.
Now, though, Apple has become a tough play ahead of earnings. Perhaps if shares have another decent fall on Wednesday before earnings (after-the-close), it may setup as a decent long. Otherwise, use caution with Apple up here. On a rally, see if it can close above $250.
Top Stock Trades for Tomorrow No. 3: Shopify (SHOP)
What a choppy name Shopify (NASDAQ:SHOP) stock has been. I’m still of the belief that SHOP stock needs to test its 200-day moving average, but so far, it’s staving off a collapse, even asa it’s down about 5% after reporting earnings.
The 50-day moving average was once support, and it’s now turned to resistance. We need to see SHOP stock clear this mark and the 100-day moving average to get anything substantial going on the upside. Over $340 would be ideal.
Now near $311, bulls have to be careful. While the October low is roughly $20 per share away, a break below that mark would not be good. It would drop SHOP below its 61.8% retracement and put the September low of $286.07 on the table.
That opens up the door to a test of the 200-day moving average and possibly the 50% retracement.
Top Stock Trades for Tomorrow No. 4: GrubHub (GRUB)We have not been a big fan of GrubHub (NYSE:GRUB) as competition heats up vs. its peers. Still, I thought I misread the quote when I saw GRUB down more than 40% on the day.
Maybe it’s finally priced appropriately as an investment, but as a trade, there’s not much left to pick at. The short side looks exhausted after a 40% one-day decline. Yet on the long side, this is a falling knife if I’ve ever seen one.
If it can hold $32.50 on the downside this week, then maybe, just maybe, you could make a case for a small long position for the aggressive bull out there.
Top Stock Trades for Tomorrow No. 5: Pfizer (PFE)Pfizer (NYSE:PFE) is up after a top- and bottom-line earnings beat and better-than-expected guidance.
The setup from here is actually quite simple. Above the 61.8% retracement and the 100-day moving average at $38.47, and PFE can continue higher, potentially up to the 50% retracement and 200-day moving average.
Above that and it can begin filling the gap up toward $41. Below Tuesday’s low, and PFE may fill its post-earnings gap down toward $37.50. Keep it simple.