Wall Street enjoyed another big rally on Tuesday, although much of those gains evaporated later in the trading session. With that in mind, here’s a look at a few top stock trades for Wednesday.
Top Stock Trades for Tomorrow No. 1: Facebook (FB)
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After reclaiming the 200-day moving average in the first half of 2019, Facebook (NASDAQ:FB) began finding this level as support throughout the second half of the year.
Under normal circumstances, a mild pullback in late February would have likely found support here too. But the coronavirus was no mild pullback, as we all know by now. Facebook shares broke abruptly lower, falling almost 40% from peak to trough.
Over the past few days, FB stock has emulated the overall market, spiking off the lows, putting in a higher lower last week and jumping higher this week. Also like the market, this week’s rally allowed Facebook to reclaim its 20-day moving average.
From here, investors need to see if Facebook can reclaim the $175 level. If so, it puts the 50-day and 200-day moving averages in play on the upside. On the downside, though, I want to see FB hold $160 as support. Below puts the recent low near $150 on the table.
Top Stock Trades for Tomorrow No. 2: Bank of America (BAC)
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Bank of America (NYSE:BAC) has posted a reasonable bounce from the lows, but is having trouble advancing beyond $23. I like BAC stock long term, but the charts do not look encouraging.
It’s even more concerning because the stock isn’t even into heavy resistance. To get to that point, the stock needs to reclaim $23, clear the March high near $24 and rally up toward $25.50. There it will find the 200-week moving average and prior range support. This area should act as resistance.
Should shares fail to reclaim $23 and fail to hold $19.50 on the downside, keep a close eye on $18, the low from the current decline.
Top Stock Trades for Tomorrow No. 3: Carnival Cruise (CCL)
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Carnival Cruise (NYSE:CCL) is bouncing hard off the lows near $8. It did so last month and is doing so early this month too. That’s promising, while bulls now have a clear downside level to trade against.
The problem though? CCL stock is having trouble reclaiming and holding the $11 to $13 area. This zone has been pretty notable support over the past few decades, which is why we had to use a monthly chart to highlight it.
If CCL can get above and stay above this area, $15 to $17 is possible, followed by $21 to $22. Below $11, and a retest of the low remains the top concern.
Top Stock Trades for Tomorrow No. 4: Netflix (NFLX)
Netflix (NASDAQ:NFLX) has been one of the better trading stocks lately (and actually the best performing FAANG name). However, it’s approaching long-term resistance near $380 to $385.
Will the stock find the strength to push through this level? If it can breakout, Netflix may run to $400, followed by $420. On a pullback, see if shares can find support between $340 — prior range support — and the 50-day moving average near $330.
Below these levels puts the 150-day moving average in play, followed by uptrend support (blue line) near $270.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, he did not hold a position in any of the aforementioned securities.
