Equities surged at the open and trended higher for most of the day. Let’s look at a few top stock trades after the powerful move.
Top Stock Trades for Tomorrow No. 1: Microsoft
Click to Enlarge
As one of the largest companies in the stock market, Microsoft (NASDAQ:MSFT) is an important bellwether name to keep an eye on.
Shares were rejected from the $187.50 area on Friday, but gapped up back toward the area on Monday. Over this level of resistance almost surely puts $190 in play. Above that and new highs are possible, as is a run to $200.
On a retreat, look for support from the 20-day moving average. Below puts last week’s low and the $175 level in play.
Top Stock Trades for Tomorrow No. 2: Penn Gaming (PENN)
Click to Enlarge
Penn National Gaming (NASDAQ:PENN) continues to move very well. If shares can close above $21.82, it will put Penn above both the 200-day and 100-day moving averages.
Above that technically puts more upside in play, starting with the 61.8% retracement for the 2020 range at $25.65.
On a decline below those key moving averages, look to see if former resistance at $20 acts as support. Below puts the 20-day moving average and uptrend support (blue line) in play near $17.
Top Stock Trades for Tomorrow No. 3: Spirit Airlines (SAVE)
Click to Enlarge
Spirit Airlines (NYSE:SAVE) is having a big day, up more than 20% at the time of this writing. The move comes after last week’s near retest of the lows around $7.50.
However, SAVE stock will soon face a critical level on the charts. Bulls will need to see how shares handle the $10.50 area, which has been resistance this month. Above that and the gap will come into play, up to $11.50.
In between those marks is the 20-day moving average near $11. Above all of these levels opens up $12.50-plus, with $15 resistance being the ultimate target in the short to intermediate term.
If this area rejects SAVE, see if the stock can avoid a retest of the May lows.
Top Trades for Tomorrow No. 4: Kohl’s (KSS)
Click to Enlarge
Kohl’s (NASDAQ:KSS) is set to report earnings on Tuesday before the open and is among the retailers that have been struggling.
However, the price action in Kohl’s has been relatively constructive. First, shares are now above both the 20-day and 50-day moving averages. Second, KSS continues to slowly but surely put in higher lows.
Earnings may test these theories, though.
On a bullish reaction, look to see if Kohl’s can close above $21, which has been multi-month resistance. Above puts the March gap-down in play, between $24 and $27.50.
On a bearish reaction, investors need to see KSS hold $15. Below puts more downside in play, with the 52-week lows just below $11.
Top Trades for Tomorrow No. 5: Baidu (BIDU)
Click to Enlarge
Baidu (NASDAQ:BIDU) will also report earnings, however it will do so after the close on Monday. It looks similar to Kohl’s too, as Baidu has spent much of the past two months trading sideways.
However, shares have rallied into recent resistance, along with the 38.2% retracement for the 2020 range. On a bullish reaction, see if BIDU can push through this level and rally up the 200-day moving average and 50% retracement near $114.70. Above puts the 61.8% retracement at $122.40 in play.
On a pullback, see if the 50-day and 20-day moving averages can buoy BIDU. Below puts $95 in play, followed by downtrend support currently near $90.
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.
