Tuesday’s price action in the stock market demonstrated hope that the worst was over and conditions would get better. Earnings-season jitters might exist, but they didn’t show up on this particular day. Today’s big stock charts feature names inching toward the green.
Some stocks started out flat and rose throughout the trading day. Others gapped up before the trading session even started, which tends to be a bullish sign.
When stocks gap up in the morning, traders are potentially showing that they’re eager to push the price higher. Therefore, let’s examine three serious morning gappers that could be signaling more green days.
Apple (AAPL)
You won’t find many companies or trading vehicles bigger than Apple (NASDAQ:AAPL) stock. But will the following days bring us green apples, or red ones?
- As the first of our big stock charts shows, Apple gapped up nicely and just kept on going on Tuesday. No upper wick on the candle indicates that the buyers kept on pushing the price up without stopping. There’s not much of a lower wick, either, and that’s also considered bullish.
- AAPL stock was already above the 200- and the 20-day moving averages. On Tuesday, the stock reached a significant milestone by piercing up through the 50-day moving average. Hence, it could be said that the stock is above all of the most commonly watched moving averages. That’s definitely encouraging for the bulls.
- The lower trend line is at around $228. However, the current stock price is nowhere close to that level now. The levels to watch now are $300 as the first test, followed by major resistance at $320.
Paypal (PYPL)
In a locked down world, online payment processors could flourish and that may benefit Paypal (NASDAQ:PYPL) stockholders. Traders might have received a big payout on Tuesday, but does the second of our big stock charts suggest more upside?
- The morning provided a decent gap up on Tuesday, with PYPL stock jumping from $106 to $109 before the regular-hours trading session even began. The stock did close somewhat higher by the end of the trading day. However, the upper and lower wicks show that there was some struggle among the buyers and the sellers.
- The gap up in PYPL stock managed to push the price above both the 50- and the 200-day moving averages. Those are important breakthroughs and the bulls should be quite happy about that. The stock had already been above the 20-day moving average. Yet, now that moving average is curling upwards, which is also bullish.
- On the other hand, the lower trend line is still slanted downwards. Still, the current price of PYPL stock is far above that trend line now. $120 will provide the next resistance line to watch out for.
Johnson & Johnson (JNJ)
Health care is more important than ever now, and Johnson & Johnson (NYSE:JNJ) stock certainly looked healthy on Tuesday. Perhaps the chart can give us a prognosis on what’s next for this stock.
- Out of the three stocks being discussed today, JNJ stock had the most impressive gap-up on Tuesday morning. In fact, we can clearly see how forceful this stock’s price action has been during the past several weeks. Ever since it bounced off of the $110 level, JNJ stock has really been on a tear.
- Tuesday’s candlestick shows a lower wick that’s sitting right on the upper trend line. So, that former resistance line could now be considered a support line. That could change very quickly, so the bulls will want to see some confirmation over the next few trading sessions.
- The stock is easily above all three essential moving averages: the 20, 50, and 200. Bulls will want to see the 50 and the 200 start to curl upwards. The 20-day moving average is already pointing upwards, so that’s a great sign for the bulls.
As of this writing, David Moadel did not hold a position in any of the aforementioned securities.
