Stocks again powered higher on Wednesday, this time as earnings acted as a positive catalyst. With that in mind, let’s look at a few top stock trades for Thursday.
Top Stock Trades for Tomorrow No. 1: Salesforce (CRM)
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Salesforce (NYSE:CRM) has had a heck of a week. First shares were in demand on news the stock would join the Dow Jones Industrial Average. Then, the company blew its earnings results out of the water — ripping more than 26% in response.
The result? A mega breakout over $210 resistance, as shares gapped up above the 161.8% extension and surged right into the two-times range extension.
Backing off that level now, it’s decision time for the bulls. I wouldn’t be completely stunned if this name pressed back up toward Wednesday’s high, if only because of how many positive catalysts we have in play. That said, it’s a great level to measure against — given that it is a key extension and with shares backing off that mark now.
Over it, and $300 is in play. On a further decline, though, see if CRM can retain the gains from Wednesday. Below the 161.8% extension could spell trouble, but I don’t expect a gap-fill down toward $217 anytime soon — short of a market-wide snafu.
Top Stock Trades for Tomorrow No. 2: Nio (NIO)
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Nio (NYSE:NIO) is a name I have liked and it has given clues to its strength.
And while shares dipped on earnings, the stock found its footing along the 20-day moving average. This measure continued to act as support, as uptrend support (blue line) also came into pay.
Once the stock cleared the $15.50 to $16 area, though, that was the sign that bulls were really in control. Shares ripped over the prior high at $16.44, and closed near the highs of the day on Tuesday. That led to Wednesday’s follow-through.
On the upside, see if we can get to the 161.8% extension at $21.59. On the downside, however, I want to see the $15 to $16 area act as support.
Top Stock Trades for Tomorrow No. 3: Netflix (NFLX)
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At the start of the month, I was looking for a breakout in Netflix (NASDAQ:NFLX) stock. Instead, a promising setup fizzled out and the stock suffered a painful three-day correction.
However, support came into play at the 50-day moving average, which NFLX stock rode higher for about two weeks leading up to Wednesday’s massive 11.6% rally. The move also triggered a break over downtrend resistance (blue line).
Now, it’s got bulls looking at the 261.8% extension near $560, as well as the all-time highs up at $575.37. Above that will put the three-times range extension in play at $598.35. The downside now is the 50-day moving average, but that’s a long ways away.
What was the key? Shares moving over downtrend resistance was the tell, but the trigger was last week’s high at $498.94. Netflix stock opened at $492.50 on Wednesday, but once it rotated through this mark and held it, then it was off to the races. That said, keep multiple timeframes in mind if you’re an active trader.
Top Stock Trades for Tomorrow No. 4: Facebook (FB)
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I flagged Facebook (NASDAQ:FB) as a big trade candidate late last week. Now, shares are delivering.
Shares were off to a strong start Monday, but faded from the highs. Then the stock burst higher on Tuesday, notching new all-time highs and closing above the 161.8% extension.
Now pushing even higher, Facebook is into the $300 area. Those that are long as a trade from last week, may consider trimming some or all of their position. Those that plan to keep some long, look for a move over $300. Over $300 puts the two-times range extension in play at $311.30.
On a dip, though, I would love to see the $280-ish area hold as support.
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.
