After an ugly reversal on Tuesday, equities posted a solid bounce on Wednesday. With that in mind, let’s look at a few top stock trades as a result.
Top Stock Trades for Tomorrow No. 1: Pinterest (PINS)
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Pinterest (NYSE:PINS) stock surged higher on Wednesday, up more than 10% at one point, after the company reported preliminary first-quarter results. The move is breaking the stock out to its highest price in a month.
There’s a bit more room in possible upside here, with the $17.50 to $18 zone appearing more prominent. Furthermore, the declining 50-day moving average is up near $18.40 at the moment.
That said, PINS has done a great job rocketing off those $10 lows. Given the reaction to Wednesday’s news, I wouldn’t expect a retest of this level anytime soon. Instead, see if the stock holds $15 on the downside. Below puts $12 back in play.
Top Stock Trades for Tomorrow No. 2: Alibaba (BABA)
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Alibaba (NYSE:BABA) stock is hitting pause, as the stock approaches its 50-day moving average and downtrend resistance (blue line). After putting in a double-bottom at $170, shares have been trading much better on the long side.
Should the stock continue to pull back, I want to see if BABA can hold the 200-day moving average as support. If it can’t, $180 is back in play. If that fails, it puts the $170 lows back in play.
On the upside, though, see if Alibaba can reclaim the 50-day moving average and downtrend resistance. That’s the big level for now.
Top Stock Trades for Tomorrow No. 3: Snap (SNAP)
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What a beauty of a move in Snap (NYSE:SNAP). Shares pulled back to the gap-up level from February 2019, down to $8. From there, we saw a robust rebound higher, as shares quickly shot back up to $12, a 50% rally in just a few days.
The stock then gave us a shallow dip, before rebounding higher and reclaiming the 20-day moving average. That gave us a higher low, which is a bullish development, particularly in this ugly tape.
Snap stock — and the market for that matter — isn’t out of the woods yet. But this action has been more positive than many would have expected a few weeks ago. From here though, shares are approaching the $14 area, where it faces downtrend resistance (blue line) and the 50-day moving average.
Above this zone puts $15.25 in play. On a pullback, however, it would be encouraging to see Snap hold the 20-day moving average and the $11 to $12 area.
Top Stock Trades for Tomorrow No. 4: Baidu (BIDU)
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Baidu (NASDAQ:BIDU) has been trading like crap — to put in bluntly. After peaking near $150 in January, shares put in a lower high in February before puking lower in March.
Amid that decline, the stock took out the August low and fell below $85 before finding its footing. Now, the stock is again flirting with a loss of the August lows near $95. Below that puts $85 back in play.
Of the many stocks in the market, I have very little interest in Baidu stock on the long side. If anything, below $95 and it looks like a potential short.
Top Stock Trades for Tomorrow No. 5: Bed Bath & Beyond (BBBY)
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Bed Bath & Beyond (NASDAQ:BBBY) roared back to life a bit on Wednesday, rallying more than 20%. However, it’s coming into a tough spot on the charts near $6.
If it can clear this area, it puts $7 back in play, which is the August low. If it can clear this area, BBBY stock could rally up to its declining 50-day moving average.
Below the 20-day moving average, and $4 remains in play. BBBY is a tough one to love, particularly in this environment. That said, moves like today emphasize how dangerous of a short it can be.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, he was long PINS.
