It was a choppy day on Thursday as we approach mid-August near the highs. With that in mind, though, let’s look at a few top stock trades to end the week with.
Top Stock Trades for Tomorrow No. 1: Fastly (FSLY)
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Fastly (NYSE:FSLY) became the growth darling from the first half of 2020. However, it has struggled since reporting earnings, having fallen for five straight sessions and suffering a peak-to-trough decline of 38%.
Shares are trying to hammer out a low here near the 50-day moving average and $75 support. However, this chart still needs some work.
On a further push higher, let’s see that FSLY can reclaim the 10-day and 20-day moving averages. Above puts that big gap from $95 to $107 in play. If it can fill that, then we’ll need to re-evaluate the stock.
If shares can’t reclaim the 10-day and 20-day moving averages, though, then we need to see the post-earnings low at $72.55 hold. Below could put a larger correction in play.
Top Stock Trades for Tomorrow No. 2: Alphabet (GOOG, GOOGL)
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Alphabet (NASDAQ:GOOGL,NASDAQ:GOOG) flirted with a strong move to the upside today, but simply couldn’t follow through.
Shares are holding the 20-day moving average and 10-week moving average well, but struggling with a weekly-up rotation over $1,520. Above keeps a move higher in play while below puts more risk on traders’ plate.
A break of the 50-day is a concern and investors who are long will likely consider stopping out below $1,460 until there is more clarity.
On the upside, I want to see GOOGL clear the February high near $1,530 before rotating up to that $1,575 to $1,600 area.
Top Stock Trades for Tomorrow No. 3: Cisco Systems (CSCO)
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Cisco Systems (NASDAQ:CSCO) is really disappointing the bulls on Thursday, down more than 11% after reporting earnings. The stock was flirting with a breakout over $48, and $50-plus would have been in play on a bullish reaction.
Instead, shares are gapping below the 20-day, 50-day and 200-day moving averages with force, while also losing the June low near $43.25 and uptrend support (blue line).
This one is tough. For bulls, this may be a no-touch for the time being. Either shares need to reclaim the July low and preferably the 200-day moving average, or it needs to decline further. Specifically, the May low could now be in play near $40.
Top Trades for Tomorrow No. 4: DataDog (DDOG)
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The trading in DataDog (NASDAQ:DDOG) has been sloppy lately, although some M&A chatter got the stock warmed up a bit today.
A move back over $82.50 is encouraging, but really, bulls want to see a close above the 20-day and 50-day moving averages and a gap-fill up toward $90. If that happens, it puts the August highs back in play near $95 — followed by the all-time high near $100.
Of course, that is assuming short-term downtrend resistance doesn’t hinder DDOG (blue line). On the downside, a break of $75 and close below the August low of $72.60 could really cause a flush in this name.
Top Trades for Tomorrow No. 5: TLT ETF (TLT)
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The iShares 20+ Treasury Bond ETF (NASDAQ:TLT) has been getting some attention lately. Working on its fifth straight daily decline, the ETF is down a quick 4% already.
Worse though, it gapped below the 20-day moving average and is now failing to hold the 50-day moving average.
From here, let’s exercise some patience. Either wait for a slightly deeper decline toward the July low, or wait for a multi-day rotation up and a reclaiming of the 50-day moving average.
A close back above the 50-day could trigger a move up toward the 20-day. Above that, and the prior highs are in play. Below the July low could put the mid-$150s on the table.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret is long FSLY.
