Social media and airline stocks dominated the market on Wednesday. Let’s look at a few top stock trades as a result.
Top Stock Trades for Tomorrow No. 1: Snap (SNAP)
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Investors have been worried about digital ad revenue, but those fears are quickly alleviating after the earnings report from Snap (NYSE:SNAP). Shares ripped higher by 30% after the quarterly results.
The stock reclaimed a number of key levels in the process, including the 50-day and 200-day moving averages, while completely clearing the rising wedge pattern it had broken below.
So, what now? I want to see Snap stock hold the 200-day moving average should it begin to pull back off its post-earnings highs. Below that puts $14 in play, although it would be quite discouraging to see it lose the 200-day at this point.
Should it continue higher, though, investors can look to the $18 level as a possible upside target. Above that, and the 52-week highs near $20 are possible.
Top Stock Trades for Tomorrow No. 2: Pinterest (PINS)
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Pinterest (NYSE:PINS), Facebook (NASDAQ:FB) and others are getting a boost on the day, too due to Snap’s results. Pinterest stock is hitting its highest level in almost two months as bulls bid it higher by more than 13%.
Shares are clearing $17.50 resistance and the 50-day moving average on the move. Bulls will want to see the stock hold these marks on a pullback to have confidence that buyers are back in control.
If the stock continues higher up through $20, see how it handles the $21 area. The 61.8% retracement is just a bit below this mark, at $20.70, and it’s been a notable level since November. Above that puts the declining 200-day moving average in play.
Top Stock Trades for Tomorrow No. 3: Twitter (TWTR)
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Like Pinterest and Facebook, Twitter (NYSE:TWTR) is also moving nicely on the day. The stock is reclaiming the $26 level this week, as well as the 200-week moving average. Both marks have played an important role in the stock’s recent price action.
At this point, it’s key that the stock holds this spot as support. Below puts this week’s low back in play, at $25.06. If that fails to hold as support, sub-$24 is possible.
On the upside, however, I want to see if Twitter can reclaim the 50% retracement for the 2020 range near $30. Above puts a move up toward $34 in play. There it will find both its 50-week and 100-week moving averages, as well as declining downtrend resistance.
Top Stock Trades for Tomorrow No. 4: United Airlines (UAL)
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United Airlines (NASDAQ:UAL) does not have promising price action. The stock is under pressure Wednesday, down about 8%, after pricing a $1 billion secondary offering.
The action is disappointing but not surprising, as the airline industry faces a very difficult situation amid the novel coronavirus outbreak.
If the stock closes below $25, it will lose uptrend support. If that happens, it puts the $21 to $22 area in play. And if that level breaks, a retest of the lows below $20 is likely on deck.
To get bullish on UAL, investors need to see the stock trade up through the 20-day moving average and downtrend resistance (blue line).
Top Stock Trades for Tomorrow No. 5: American Airlines (AAL)
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Like United, American Airlines (NASDAQ:AAL) is also under pressure Wednesday, falling more than 6%. The stock remains under steep downtrend pressure and is teetering on an important support level.
That comes into play at $10, the March low. Unfortunately, AAL stock broke below this low in April, bottoming near $9 before reclaiming $10 and rallying.
From here it’s simple. Either $10 gives way and puts $9 on the table, or it holds and bulls need to see AAL reclaim downtrend resistance and the 20-day moving average. If it can, it puts $13-plus in play.
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.
