Stocks shook off a tough Tuesday trading session, jumping notably on Wednesday. With that in mind, let’s look at a few top stock trades now for Thursday.
Top Stock Trades for Tomorrow No. 1: S&P 500 ETF (SPY)
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On Tuesday, we preached caution to investors. With the Volatility Index (VIX) at $30 to $35-plus, traders needed to take caution in this erratic market environment. The VIX is still in that range, even as the SPDR S&P 500 ETF (NYSEARCA:SPY) rises about 3% in afternoon Wednesday trading.
With that in mind, here’s how it’s setting up now.
Today, the 200-day moving average acted as support, but the SPY is still struggling to press through this $309.50 area. On the downside, $297.50 to $300 has been solid support. Given this range and the sharp move from last week’s lows, traders now have a trading range to observe.
Below the 200-day moving average, and the $297.50 to $300 range is on the table. Below that, and uptrend support near $295 (blue line) is possible. Should the SPY continue lower, the low near $285 possible.
Over $310, however, and the $315 level and 100-day moving average are on the table. Above that, and $320 to $322.50 is possible.
Keep it simple, and move level to level.
Top Stock Trades for Tomorrow No. 2: Uber (UBER)
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Coronavirus worries are hitting the travel sector hard, and Uber (NYSE:UBER) hasn’t been able to escape the damage either. Shares fell from $41 to $31 in a hurry, although the stock has hammered out a nice bottom over the past five sessions.
Notice those long wicks on the chart here, as each one is just a bit more shallow than the prior one. However, $34 has stepped in as resistance each time as well.
On a move over $34, the $35.50 mark is possible. That area marks the 50-day and 200-day moving averages, as well as prior uptrend support (blue line).
While Uber has moved below the 100-day moving average in each of the past five sessions, it also continues to close above this mark. Therefore, use this metric as a sign of caution, but not necessarily as a stop-loss point. Instead, a break below $31 is more concerning in my view.
Top Stock Trades for Tomorrow No. 3: Roku (ROKU)
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One of growth investors’ favorite stocks, Roku (NASDAQ:ROKU) has been disappointing for a while now. Even though more people are likely to stay home and stream video than before the coronavirus outbreak, buyers just don’t want this one right now.
After it lost the $118 mark, we’ve seen a quick flush down to this $105 to $110 area. Even with the markets rebounding a bit, Roku continues to hang near the lows. This type of relative weakness is concerning, as a pullback in the markets may put more pressure on Roku.
If the stock breaks $105, investors have to be ready for a test of the $98 to $100 area. And below that puts $90 on the table.
Top Stock Trades for Tomorrow No. 4: AT&T (T)
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AT&T (NYSE:T) is moving higher Wednesday after reiterating its 2020 guidance and announcing an accelerated buyback program.
If the stock can hurdle $38, where the 50-day and 100-day moving averages sit, then technically speaking, $39 resistance is possible. That seems like a tough ask given the market environment, but with the Fed’s latest rate cut, AT&T’s hefty yield may attract buyers. Plus, telecom stocks are generally seen as a flight-to-safety trade.
On the downside, though, I don’t want to see AT&T break $35.50. That puts it below $36 range support and the 200-day moving average. It also puts the $33 low back in play.
So for now, I’d be a buyer near $36.
Top Stock Trades for Tomorrow No. 5: Etsy (ETSY)
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A few days ago, we flagged Etsy (NASDAQ:ETSY) stock as a relative strength play. Up notably on Wednesday, that theory continues to play out.
The stock is losing some steam going into the final hours of the session, but man, look at that move today! That’s a beauty of a setup, as bulls see an ascending triangle play out to perfection. That’s as rising uptrend support (blue line) continued to squeeze Etsy shares up against a static level of resistance (black line), before bursting higher. Resistance happened to come into play at the notable $60 mark.
Should Etsy continue higher, see if a push to the mid-$60s is possible. If it gets there, $70 resistance is technically on the table.
On the downside, however, I first want to see if $60 holds as support. Below puts uptrend support in play, with the 200-day moving average on the table below that.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long T and ROKU.
