After big gap-up, stocks flushed lower in Wednesday’s session. However, the S&P 500 recovered those losses and climbed to new session highs. With that in mind, let’s look at a few top stock trades amid that action.
Top Stock Trades for Tomorrow No. 1: Twitter (TWTR)
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Twitter (NYSE:TWTR) stock rallied strong on Tuesday, but ran right into its 200-day moving average. On Wednesday, it couldn’t gain traction over this mark either.
On the plus side, though, Twitter filled Tuesday’s gap with Wednesday’s minor dip. From here, we’ll either need to see bulls regain momentum and reclaim the 200-day moving average, or look for a potentially deeper pullback.
If it can clear the 200-day, then it could put $36-plus in play. Above $36, and a gap-fill up to $38 is on the table. Below $32, however, and investors should look for a possible dip down to the 20-day moving average and possibly the $30 mark.
Top Stock Trades for Tomorrow No. 2: Zoom Video (ZM)
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We had a sharp decline earlier in the session and that shows up well in Zoom Video (NASDAQ:ZM). Shares came down into the 50-day moving average before bouncing hard.
On the upside, see if ZM stock can reclaim the 20-day moving average. Back above the 20-day, and $175 resistance is on the table. Below the 20-day, though, and it’s possible that Zoom will retest its 50-day moving average. This area remains a buy-the-dip situation until proven otherwise.
Top Stock Trades for Tomorrow No. 3: Tractor Supply (TSCO)
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Tractor Supply (NASDAQ:TSCO) has been rallying incredibly well from the lows.
On the weekly chart above, investors may notice the stock has climbed for eight straight weeks. While it was running into resistance near $112, this week’s action has allowed TSCO to clear this mark.
On the downside, we now want to see this level hold as support. On the upside, however, see if Tractor Supply can climb to $122.17 — the 161.8% extension for the 2020 range.
Top Trades for Tomorrow No. 4: Costco Wholesale (COST)
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Costco Wholesale (NASDAQ:COST) will report earnings on Thursday, but the stock has not been acting like its peers; That is, running up into the print. Instead, Costco stock has been tightening below downtrend resistance (blue line).
If shares can break out of this trend and rotate over last week’s high at $309.02, it could have upside up to the $312.50 area. Above that and the April highs near $320 are possible.
On a breakdown, it would be very discouraging to see a close below the 200-day moving average. That puts Costco below $300, as well as all of its major moving averages.
Top Trades for Tomorrow No. 5: Nordstrom (JWN)
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Nordstrom (NYSE:JWN) shares have been surging back the last two days. On Tuesday the stock jumped 7.3%, preluding Wednesday’s 17% jump.
With the rally, JWN is clearing the 20-day and 50-day moving averages. However, it’s running right into the 23.6% retracement. I put more weight in the former than the latter.
That said, if JWN can clear the 23.6% retracement, look for a dip to the 20-day and 50-day moving averages. Below puts $15 back in play. On the upside, look for a rally up to $22 resistance. Above puts the gap-fill up to $24 and the 38.2% retracement on the table.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities.
