Stocks hit new record highs as investors continue to digest the phase one trade deal inked between the U.S. and China on Friday. Let’s look at a few top stock trades as we start the last full trading week of December.
Top Stock Trades for Tomorrow No. 1: Twitter (TWTR)
Twitter (NYSE:TWTR) was remains obliterated after its October spill took it from ~$39 to $29 in just a few trading sessions. Unfortunately, shares never got quite as low as I was hoping for, which was for a dip into the $26 to $28 area.
In any regard, the stock has started looking better on the long side. It’s putting in a series of higher lows (blue line) and is now testing into its November highs near $31.36.
A move above this level could trigger a rally to the October high at $32.39. It’s not clear yet how Twitter stock will react upon a retest of its declining 50-day moving average. Above it though and the stock can begin filling its October gap.
If shares turn lower, look to see that uptrend support holds. Falling below that puts $29 on the table.
Top Stock Trades for Tomorrow No. 2: Nike (NKE)
In October, Nike (NYSE:NKE) shares rallied to new highs near $96.60. When the stock pulled back, though, an important development occurred when prior resistance at $89 held as support.
This gave bulls an excellent buy-the-dip opportunity, particularly because it was not a sharp rebound off of $89. Instead, shares chopped just above this mark for a few weeks before spiking higher.
Now racing to new highs again, bulls are looking for more upside. Look to see that Nike stock gets to $100 from here. On a pullback, I want to see shares hold the $96 to $97 area (blue box). Below that puts the 20-day and 50-day moving averages on the table.
Top Stock Trades for Tomorrow No. 3: Luckin Coffee (LK)
Luckin Coffee (NASDAQ:LK) came public at a tough time, as trade talks were deteriorating in May 2019. In any regard, the Chinese coffee chain has been on fire in recent trading.
In November, shares gapped up — twice! — and eventually surged north of $30. This price action leans incredibly bullish and has investors looking for even more upside.
The stock has been consolidating in a wide range lately, between $29 and $32. A move over the latter could put a big-time breakout on the table. The first upside target is $33.48, the November high. Above that and $35 will be on the radar.
On a pullback, see that the rising 20-day moving average buoys the stock. Below that puts range support at $29 on the table.
Top Stock Trades for Tomorrow No. 4: FedEx (FDX)
FedEx (NYSE:FDX) has not been a healthy stock. Shares continue to struggle with downtrend resistance, while support comes into play around $150.
FDX stock has been plagued by poor action for years now. On the plus side though, the stock actually broke out over downtrend resistance (blue line) last week. It also closed above the 200-day moving average. Those are some bullish developments, but be careful.
Shares closed above the 200-day moving average in September too, only to get crushed a few days later. With earnings due up on Tuesday, bulls shouldn’t get cocky.
On a pullback, I want to see shares hold up over the 20-day moving average and former downtrend resistance. That I want to see a post-earnings rally.
A pullback that goes through its major moving averages puts $150 back on the table. Below puts the October lows on the table and keeps FDX stock in an unhealthy development. Let’s see how it looks later this week after it reports.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities.
