Stocks started the second quarter off on the wrong foot, tumbling lower on the day. That said, here’s a look at a few top stock trades now.
Top Stock Trades for Tomorrow No. 1: Microsoft (MSFT)
Microsoft (NASDAQ:MSFT), the largest holding in the SPDR S&P 500 ETF (NYSEARCA:SPY), is starting to roll over. Shares failed to hold up over the 100-day moving average and were swiftly rejected by the 50-day moving average.
Let’s see how the stock does on a slightly deeper decline, down to the $150 mark and the 200-day moving average. If this zone fails to buoy the stock, more downside could be in a store.
I would love to see another test of $140 to see how Microsoft holds up. If $140 steps in as support, MSFT should avoid a retest of the lows near $135. Below both levels puts $130 in play. A pullback to prior resistance that holds as support is not only healthy price action, but would be a constructive development as investors get a higher low to work with.
On the upside, though, see if the stock can reclaim its 100-day moving average. Above that, and the 50-day moving average is in play.
Top Stock Trades for Tomorrow No. 2: S&P 500 ETF (SPY)
Speaking of the SPY ETF, let’s take a closer look at the stock.
Last night I flagged a very similar chart, but also highlighted that SPY was failing at its 200-week moving average. On the daily chart above, you can see that the 20-day moving average acted as resistance, as did the 38.2% retracement for the 2020 decline (which is also the 52-week range).
Shares are now struggling to hold the less-important 23.6% retracement. Below that mark and the Q4 2018 lows near $233.75 are in play. If those hold, bulls may view it as a buy-the-dip opportunity with a higher low in place. If it fails to hold, it puts the 2020 lows in play just below $220.
Top Stock Trades for Tomorrow No. 3: AT&T (T)
At the start of the selloff, AT&T (NYSE:T) was holding up okay. But the selling pressure got to this stock, too — which has since fallen below $30. It’s had trouble reclaiming this mark, as it moves down into the upper $20s.
Last week, the $26 mark propelled shares higher, but a retest of that low isn’t out of the question right now. If that level breaks, the $25 mark is in play, which as has been multi-year support for some time now.
On the upside, however, let’s see if AT&T can reclaim $31. Above that puts its 100-week and 200-week moving averages in play between $32 and $32.50. Above that and the mid-$30s are on the table.
Top Stock Trades for Tomorrow No. 4: Peleton (PTON)
There was no love for Peloton (NASDAQ:PTON) when the company went public in September. Up almost 10% on Wednesday and after surging from its lows near $18 in March, PTON is clearly back in favor.
The stock is approaching its $29 IPO price, which has been resistance over the past few months. Above this mark and downtrend resistance currently near $31.50 is in play. Above that and $34 is possible.
On a pullback, see if Peloton can find support between $24 and $25. Below puts $21 on the table. Below that and the March lows are in play, where buyers previously stepped in over several sessions.