The first day of September saw more money flow into stocks, with the S&P 500 hitting its eighth-straight record high. With that in mind, let’s look at a few top stock trades for Wednesday.
Top Stock Trades for Tomorrow No. 1: Zoom Video (ZM)
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Wow, what an incredible run it’s been for Zoom Video (NASDAQ:ZM). Shares jumped more than 8% on Monday, hitting new all-time highs ahead of earnings. That was nothing in comparison to the stock’s 40% surge on Tuesday, though.
The company now commands a $130 billion market cap and is up huge in 2020. The only problem is, has the stock run too far?
Perhaps not. The quarterly results have been great as Zoom is clearly planted in a paradigm shift in the way businesses, friends, schools and other groups meet now.
However, it’s a difficult stock to map at these levels. Without a very deep dip, it’s hard to draw extensions. There is not a moving average nearby, nor a key support or resistance mark.
A move below Tuesday’s low and $400 could put the 423.6% extension in play near $350. On the upside, though, a move over Tuesday’s high likely puts $500 on the table.
Top Stock Trades for Tomorrow No. 2: Gogo (GOGO)
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Gogo (NASDAQ:GOGO) is a stock I touched on in August, and one I have been harping about on Twitter (NYSE:TWTR).
At the end of Tuesday, shares were up 43% on the day. And in the last two weeks, the stock is up more than 123%.
No, I don’t think the move is too much, too fast. There have been very key fundamental developments in this name that are driving it higher. Short of them unraveling, this stock could still have higher to go.
While Gogo may pull back in the next few days or weeks, I think it’s heading higher over the next few months and quarters.
The $8 level has proved pivotal in recent years. However, should shares close above this mark, it could create the catalyst for a rotation up over $10. Specifically, we could be looking at the 161.8% extension, at $10.88. On the downside, it would be promising to see this name hold up over $6 to $6.50.
Top Stock Trades for Tomorrow No. 3: Chewy (CHWY)
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Chewy (NYSE:CHWY) is another name I recently flagged and also harped about on Twitter. While I did not expect such a large breakout on Tuesday, I was looking for a move over resistance.
The e-commerce and at-home trends are clear, so not only does Chewy has solid technicals, the trends make sense too.
On Monday, shares quietly broke out over $60 resistance. On Tuesday, the stock burst over the two-times range extension and ran toward $70. I wouldn’t be surprised to see the 261.8% extension hit near $75 — either before or after earnings on Sept. 10.
On the downside, look for support from the 10-day moving average, followed by the prior breakout level near $60.
Top Stock Trades for Tomorrow No. 4: Walmart (WMT)
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Walmart (NYSE:WMT) stock is trading wonderfully for the bulls, bursting to new highs on news of its Walmart+ plan.
Last week, shares rallied to the 161.8% extension but struggled to gain traction. Now the stock is powering through the two-times range extension.
On the upside, let’s see if Walmart can get to the 261.8% extension near $160. On the downside, I want to see if the 161.8% extension acts as support. Below may put $132 to $133 back in play.
On the date of publication, Bret Kenwell held a LONG position in GOGO and CHWY.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
