The market was a bit wobbly today, but several indices still found a way to hit new all-time highs. With that in mind, let’s look at a few top stock trades for Friday.
Top Stock Trades for Tomorrow No. 1: Walmart (WMT)
Walmart (NYSE:WMT) caught a major bid on Thursday as reports swirled that it’s working with Microsoft (NASDAQ:MSFT) on a deal for TikTok’s U.S. operations.
Shares ended the day up about 4.5%, but are being sold from the highs. It’s got WMT stock stuck right at the 161.8% extension, a level that denied Walmart earlier this month.
Let’s see if shares can close above this mark. If they can, it puts Thursday’s high back in play at $139.15. Above that, and investors may very well turn their attention to the two-times range extension up at $145.75.
A close below the 161.8% extension, however, could cause WMT to lose some air. In that case, see that the $133 area acts as support. Below uptrend support (blue line) puts the 50-day moving average on the table.
Top Stock Trades for Tomorrow No. 2: Ulta Beauty (ULTA)
From May through the first part of August, the $188 to $190 area was dependable support in Ulta Beauty (NASDAQ:ULTA).
And after a rally to the 200-day moving average, the stock found this to be resistance. However, it also found the 20-day and 50-day moving averages as support as the stock put in a higher low.
These are positive developments, as shares now sit just below the 200-day moving average and stiff downtrend resistance (blue line). This action has us watching a few main levels with earnings due up after the close.
On a move higher, see that Ulta clears the $230 area, putting it above the 200-day and downtrend resistance. That puts the $250 to $255 area in play, which is the high from June. Keep in mind, the 200-week moving average is up at $258.
On a bearish reaction, though, I want to again see the 20-day and 50-day moving averages hold as support, as well as last week’s low at $203.90. It’s worth mentioning that Ulta’s 10-week and 20-week moving averages are also nearby, at $212 and $214, respectively.
Below all of these marks, and the $188 to $190 area will again be in focus.
Top Stock Trades for Tomorrow No. 3: Abbott Labs (ABT)
Abbott Labs (NYSE:ABT) caught a nice boost on Thursday, rising almost 8% on news of its new rapid test for the novel coronavirus.
After breaking out over downtrend resistance in July, this name has slowly but surely been grinding higher. While the 138.2% extension was acting as resistance, shares burst over this mark on Thursday, opening and holding above the 161.8% extension.
I really like the price action here — it’s constructive without being obnoxious.
In any regard, look for ABT to hold up above the 161.8% extension now. Below puts Thursday’s low in play. Below that and shares could fill the gap back toward $100. Above Thursday’s high puts the two-times range extension in play near $122.
Top Stock Trades for Tomorrow No. 4: Quidel (QDEL)
Quidel (NASDAQ:QDEL) shares were obliterated on Thursday, falling almost 40% at its lows.
However, that’s also where the stock found support, as its 200-day moving average came into play. Given the session’s wide range, it makes it difficult for those that didn’t buy the dip down into support.
If you missed it, let’s consider giving QDEL a few more days to consolidate. Perhaps it will give us a shot near prior support around $148 to $150 or another test-and-hold of the 200-day moving average.
Stretching out the entire 2020 range, bulls who are long can target $190 on the upside, which is roughly the 50% retracement. Should it get there, we can re-evaluate the stock from there.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret did not hold a position in any of the aforementioned securities.