After a painful decline on Tuesday, the market gave investors the rebound they were looking for Wednesday. With that in mind, let’s buckle down and look for a few top stock trades going into Thursday.
Top Stock Trades for Tomorrow No. 1: Lululemon (LULU)
Shares slipped 7.4% on the day, gapping below the 50-day moving average and uptrend support (blue line). The selling pressure is also pushing LULU below $320, a notable breakout level from July.
This leaves traders in somewhat of a conundrum when it comes to Lululemon. It’s not really down into a meaningful level of support that’s holding, but it’s not giving us any signs of a reversal (even on a strong market day).
I’d love to see a deeper dip in LULU now, perhaps down into the $285 to $300 zone. Below could push it even lower, perhaps down toward the 200-day moving average, which would be a solid buying opportunity (at least, at this point).
If Lululemon stock finds its footing before such a dip occurs, look to see if the stock can reclaim the 50-day moving average. Above puts the 161.8% extension in play near $351. Above that puts the 20-day moving average on the table near $365.
Top Stock Trades for Tomorrow No. 2: Boeing (BA)
Boeing’s (NYSE:BA) price action is comprised of a series of lower highs, as downtrend resistance continues to squeeze shares lower (blue line).
Earlier this week, the $165 to $170 area gave way, as the stock now scrambles to find support. The fact that Boeing isn’t completely breaking down is surprising — and good — but it’s not exactly shouting “confidence” from the rooftops.
On a further decline, see if BA rotates below the August low at $153.41. Just below that is the 23.6% retracement at $150.10. Below that and Boeing is in no man’s land.
On the upside, though, let’s see if Boeing can reclaim $170, followed by the 20-day and 50-day moving average. To be a buyer on the upside (as opposed to on a dip), I believe I’d want to see a rotation over last week’s high near $180.
Otherwise, buying on a rally can be too sloppy and frustrating. Over last week’s high will give bulls more clarity.
Top Stock Trades for Tomorrow No. 3: American Eagle Outfitters (AEO)
American Eagle Outfitters (NYSE:AEO) is down slightly after reporting earnings, but finished the day 1.6% higher. This comes down to two areas now, though.
If AEO stock can push higher, it needs to clear $13.50. One can see quickly and easily that this level has been very relevant over the past year. Above opens the door to the $15 to $16.50 area.
If $13.50 remains resistance, however, we have to consider the downside. Specifically, a rotation below last week’s low at $12.22 puts the $11.15 to $12 area in play. There AEO finds its 20-day, 50-day and 200-day moving averages, as well as uptrend support (blue line).
Top Trades for Tomorrow No. 4: Zscaler (ZS)
Zscaler (NASDAQ:ZS) will report earnings after the close, and shares have already suffered a quick pullback.
For now, the 50-day moving average and uptrend support (blue line) continue to hold as support. Obviously this would be a great dip-buying opportunity if earnings weren’t in the way.
On a bearish reaction, see if the 261.8% extension (from the March low to the February high) acts as support near $115. Below could put the $98 to $100 area in play, followed by the 161.8% extension near $85 and the 200-day moving average.
On the upside, see if ZS can reclaim the 361.8% extension near $147. Above technically puts the all-time high in play at $163.80.
Top Trades for Tomorrow No. 5: Coupa (COUP)
Coupa Software (NASDAQ:COUP) has been hammered over the last five days. Shares are down 26.5% from its highs in that span, punctuated by Wednesday’s 5.9% decline.
For now, the two-times range extension is acting as support. Aggressive buyers who like COUP can buy it against Wednesday’s low. Below that may put the $240 breakout level in play, followed by the 161.8% extension near $225.
On the upside, I need to see Coupa reclaim $280. This was a strong range support level over the last few months. Above it puts the 20-day and 50-day moving averages in play near $300, followed by $320, which was resistance, then a breakout level, last month.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article.