A tentative agreement between the U.S. and China, as well as a predictable Fed has investors feeling good as they bid up stocks. Let’s look at a few top stock trades for Friday.
Top Stock Trades for Tomorrow No. 1: Broadcom (AVGO)
We were looking for a breakout in Broadcom (NASDAQ:AVGO) stock, but doing so in the same session ahead of earnings is risky. Shares rocketed through its prior highs and resistance, ripping to a high of around $330.
Now what? Should shares pull back after reporting earnings, I would love to see prior resistance hold as support near $320. Should it fail, bulls will still be okay as long as AVGO can find support above $314.
There it has the rising 20-day moving average, as well as prior April and May resistance near $315. Below this area could bring up a test of the $300 level.
On the upside, it’s hard to say where AVGO could rally to on a bullish earnings reaction — the analysts certainly are bullish. Currently, there is a Fibonacci extension up at $349.65 based on the prior 52-week range. But most importantly, see that AVGO holds the breakout level or prior support at this point.
Top Stock Trades for Tomorrow No. 2: Micron (MU)
Micron (NASDAQ:MU) shares made a beautiful breakout on Wednesday and followed it with even more upside on Thursday. Investors will now want to see if shares can clear the $51 level and continue higher.
Remember, Micron was trading north of $60 per share in 2018 and if it can regain momentum, a push higher certainly isn’t out of the question.
On a pullback, $48 and the prior downtrend (blue line) will need to hold as support.
Top Stock Trades for Tomorrow No. 3: Advanced Micro Devices (AMD)
Talk about a loaded top three picks, huh? Chips have been on fire, so it should come as little surprise that Advanced Micro Devices (NASDAQ:AMD) is working on the long side again.
After hitting $41.79 last month, shares of AMD have cooled. However, the 20-day moving average continued to buoy the stock and on Thursday, shares broke out over downtrend resistance (blue line).
Now, let’s see if the stock can breakout over its prior highs. The stock failed at $41.75 in back-to-back sessions in November. A move over this mark could trigger a rally into the mid-$40s and possibly higher. On a pullback, see that the 20-day moving average continues to hold as support.
Top Stock Trades for Tomorrow No. 4: Activision Blizzard (ATVI)
It doesn’t get much simpler for Activision Blizzard (NASDAQ:ATVI). With Thursday’s move over $57, the stock is officially breaking out.
I would consider the $56 to $57 area as the must-hold mark, but some bulls may be more specific and require ATVI stock to stay over the September high of $57.52. Either way, shares are breaking out and as long as prior resistance holds as support on a pullback, the bulls are okay on the long side.
With the move now, bulls will look to fill the stock’s November 2018 gap down. To do so completely will require a rally to $62.35.
Top Stock Trades for Tomorrow No. 5: Ciena (CIEN)
Ciena (NYSE:CIEN) shares are rocketing higher, up almost 20% after reporting earnings. The move thrust shares over all of its major moving averages, as well as downtrend resistance (blue line).
The rally also sent CIEN stock up through the $40 to $41 area, which has been significant over the past year. Now, see that it stays above this zone. In the middle of it — at $40.66 — is the 61.8% retracement. Below that and the 200-day moving average will be on the table.
On the upside, see if Ciena stock can rally to the 78.6% retracement. Above puts range resistance near $45 to $46 in the cards.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long AVGO.
