Coronavirus worries weighed on stocks, as investors try to balance buying the dip and remaining cautious. Let’s look at a few top stock trades for this shortened trading week.
Top Stock Trades for Tomorrow No. 1: Roku (ROKU)
Roku (NASDAQ:ROKU) has been trading really poorly lately, with the exception of Tuesday. Despite its nearly 5% rally, there’s still a lot of “junk” overhead. That is to say, the chart just isn’t clean right now.
Some investors will say Roku is clearing downtrend resistance (purple line), while others will say it has yet to do so (brown line). Either way, it’s trying to reclaim its 20-day moving average, and is still below its 50-day moving average.
I don’t really like messy charts. However, we can simplify this one. On the upside, let’s see if Roku can clear the 50-day moving average near $141.75. Above it puts $150 on the table, a notable level since August, and it’s also where the backside of prior uptrend support (blue line) comes into play.
On the downside, look to see if Roku breaks below $127.50 support. Below puts the $117.50 to $120 area, and the 200-day moving average on the table.
Top Stock Trades for Tomorrow No. 2: Netflix (NFLX)
On Tuesday after the close, Netflix (NASDAQ:NFLX) will report earnings. While the stock suffered badly in the third quarter, it has performed quite well since the start of the fourth quarter. Even though bulls are in control at the moment, this one tends to be a wild mover on earnings.
Shares have reclaimed the 200-day moving average and continue to ride the 20-day moving average higher. However, the stock hasn’t been able to reclaim prior range support near $340.
The setup now is simple: Either bulls rally NFLX stock on earnings and reclaim $340, or shares pull back.
If it’s the former, look to see if NFLX can fill the gap back up toward $362. Above it puts $370 on the table, followed by range resistance at $385. On a pullback below the 20-day moving average, look for support from the 200-day moving average near $323, with the 50-day moving average and uptrend support at $315.
Top Stock Trades for Tomorrow No. 3: Yeti (YETI)
Yeti (NYSE:YETI) posted big gains on the day, but is hitting a critical level on the upside. The $35 to $36.50 zone has been a big level of resistance over the past year, as investors have failed to sustain any of the stock’s rallies over this area.
On the plus side, the stock continues to put in a series of higher lows and is not overbought — technically speaking.
If Yeti can clear Tuesday’s high, it puts the 2019 high just over $38 on the table. Over that, and $40-plus can be achieved amid a powerful breakout. Likewise, resting in this $35 to $37 zone could give Yeti stock a necessary pause before continuing higher too.
Below $35 may keep resistance in play for the time being, and likely puts the 20-day moving average in play.
Top Stock Trades for Tomorrow No. 4: McDonald’s (MCD)
McDonald’s (NYSE:MCD) stock began struggling in October, but was then hammered after earnings. The stock fell 15% from peak to trough, and dropped below all of its major moving averages.
Since bottoming in early November, McDonald’s stock has been acting much better, and the stock has really taken flight so far in 2020. Shares are technically overbought (blue circle), but are now taking pause.
If MCD continues higher, look to see if it can reclaim $215. Over $215 puts $220 resistance on the table. However, a controlled pullback to the 200-day moving average and uptrend support (blue line) would be ideal for bulls to buy the dip.
Top Stock Trades for Tomorrow No. 5: Beyond Meat (BYND)
Beyond Meat (NASDAQ:BYND) remains volatile, rallying about 11% on Tuesday and moving out of that nice bullish consolidation from last week.
Let’s see if BYND can take out last week’s high near $135. Above $140, and the $170 area may be possible. On a pullback, see that $110 buoys Beyond. Below the backside of prior downtrend resistance (blue line), and the 20-day or 50-day moving average is possible.