While earnings had quieted down over the past few days, a number of retail results hit the tape on Tuesday. That created some volatility in the market, even if it was just in a few specific names. Let’s look at our top stock trades for Wednesday.
Top Stock Trades for Tomorrow No. 1: AT&T (T)
Shares of AT&T (NYSE:T) were hammered on Tuesday thanks to a downgrade. At one point, T stock was down almost 6% on this news, which is ridiculous for a stock that just hit a 52-week high in the prior session.
In any regard, it may have given bulls an opportunity.
This stock has been on fire since its summer lows. Each pullback to the 50-day moving average has come on a somewhat extreme move. And so far, each time shares have rebounded aggressively.
In this case, shares were also testing into the $38 area, which looks to be support from late October.
Here’s the deal, though. If the 50-day and $38 level can’t buoy T stock, more downside could come. That would put the 100-day moving average and $36 to $36.50 area on the table. I would view a pullback to this area as a rather attractive buying opportunity, given how each dip to the 100-day (purple arrows) has been gobbled up and how well $36 has supported the stock since September.
Top Stock Trades for Tomorrow No. 2: Macy’s (M)Macy’s (NYSE:M) is the complete opposite, as shares continue to trend lower — and a data breach doesn’t help.
The stock had reclaimed the 50-day moving average ahead of earnings, but couldn’t hold this mark on a pullback. Now bulls have to see if short-term uptrend support (purple line) can buoy the name.
If it can’t, a test of the $13.90 to $14.10 area could be on deck. Below that and new lows are possible. If support holds and shares of Macy’s bounce, see if they can reclaim the 50-day moving average.
Top Stock Trades for Tomorrow No. 3: TJX Companies (TJX)TJX Companies (NYSE:TJX) is one of the better-acting retail stocks from Tuesday, although its pedestrian rally isn’t going to turn many heads.
I want to see if TJX can hold up over the $60 to $60.50 area. This was the prior high from October, and if shares can’t maintain above here after earnings, TJX may need to pull back and/or consolidate before continuing higher.
Above $60.50 and channel resistance near $62 is certainly possible. Below $60 and a dip to the 50-day moving average could materialize.
Top Stock Trades for Tomorrow No. 4: Home Depot (HD)Home Depot (NYSE:HD) has been one of the more consistent retail stocks out there, but the bulls couldn’t count on it Tuesday. Shares fell about 5% after disappointing Wall Street with its quarterly results.
The move likely has some investors confused on what to do — buy the dip or sell HD stock?
Perhaps consider waiting for a bit more downside. Shares have routinely found support from the 100-day moving average and uptrend support (blue line). If we get a further dip into this area, it may be a worthwhile buying opportunity.
If support fails, a drop to the 200-day moving average is possible. On a bounce, see if HD stock can rebound to its 50-day moving average up at $232.
Top Stock Trades for Tomorrow No. 5: Kirkland Lake (KL)Kirkland Lake (NYSE:KL) is one of the more highly followed miners out there. A look at the chart may reveal why.
Look at the beautiful multi-month wedge (blue lines) that has formed in KL. Wedges are great technical setups, because eventually, the stock has to break out or break down. Learn to spot these types of opportunities.
In the case of KL, shares broke out over wedge resistance last week, while consolidating below the $48 level. With Tuesday’s rally, KL pushed through this mark, putting $50-plus on the table.
In August and September, $50 drew in the sellers, with shares topping out at $51.04. See if the stock can push through this mark and make new highs. On the downside, bulls will want to see $48 hold as support, as well as the 50-day and 100-day moving averages below that.