A day after being thumped, U.S. stocks bounced back with a vengeance on Tuesday. With that in mind, let’s look at a few top stock trades as earnings season gets underway.
Top Stock Trades for Tomorrow No. 1: Apple (AAPL)
Originally, I was going to use a shorter term chart, but decided that a nine-month look showed just how well Apple (NASDAQ:AAPL) stock has done over the past few quarters.
This stock has been on a near unstoppable run from the June and August lows. However, perhaps Tuesday’s earnings report continue that run, or perhaps it kickstarts a pullback.
On Friday, Apple hit a new all-time high of $323.33 — although shares failed to close above $320 resistance. Should Apple rally on the report, see if it can close above this mark to kickstart a rally higher.
On a pullback, see if it breaks below Monday’s low of $304.88 and the 20-day moving average. Below puts the $290 to $300 level on the table, as well as uptrend support (blue line). It may even cause a test of the 50-day moving average.
I like Apple very much, and believe it is a buy-on-dips stock at the moment. But, it’s hard to be all-out bullish after this kind of run.
Top Stock Trades for Tomorrow No. 2: General Electric (GE)
Had General Electric (NYSE:GE) managed to stay in the Dow Jones Industrial Average, this would have been a Top Stock Trades column for the Dow’s hottest names.
In any regard, despite GE’s vulnerable state, the stock continues to hold up. Shares are finding support at the 50-day moving average, and are putting in a series of higher lows via uptrend support (blue line).
A move below these two measures, and GE may have so more downside ahead. For now, though, the stock continues to hold up OK. Above the 20-day moving average now, see if the stock can retest $12.25 resistance. Over that mark, and more upside is possible.
Remember, GE reports earnings Wednesday morning.
Top Stock Trades for Tomorrow No. 3: 3M Company (MMM)
It’s not a good day for 3M Company (NYSE:MMM); Although, at least the stock is avoiding new lows for the time being.
Shares gapped below the 50-day moving average, and are knifing through the 100-day and 200-day moving averages on worse-than-expected earnings.
The 78.6% retracement for the one-year range comes into play at $165.37. Will that be enough to buoy the stock? It might, but MMM stock is a mess right now. It has little to no momentum, and the stock is below trend and its key moving averages.
Traders, however, may consider giving it more time to see if it finds support at the 78.6% retracement, can reclaim its 100-day and 200-day moving averages or trades to a lower price to improve the risk/reward profile.
Without more clarity, MMM is a no-touch for me right now.
Top Stock Trades for Tomorrow No. 4: Pfizer (PFE)
In other words, PFE stock has about 65 cents worth of support between here and the 100-day moving average. Below it, and shares begin to drift into no man’s land. This is where they become a no-touch until a more well-defined trend starts to show itself, or until PFE can reclaim some key levels.
If shares can reclaim the 200-day and 50-day moving averages, PFE may regain its footing and find some bullish momentum. So bulls can either wait for that, or look for support at the 100-day moving average and 61.8% retracement.