Stocks opened lower on Thursday, but by the close most of those losses were gone as bulls bid up the market. Let’s look at a few top stock trades as we approach Friday and mid-month.
Top Stock Trades for Tomorrow No. 1: Zoom Video (ZM)
Click to Enlarge
The market is liking Zoom Video’s (NASDAQ:ZM) latest products and platforms, as investors continue to bid the name up to new highs.
This stock continued to trade in a very tight and controlled manner. After the surge higher in September, Zoom dipped, but found support at the 10-day moving average. A nice double-bottom low near $350 was enough to bring bulls back to the table, as shares now look for a move up toward $550.
On the upside, see that ZM can close over the prior month’s high and the 138.2% extension at $528.55. If it can, it puts the 161.8% extension in play near $560.
On the downside, I want to see the $500 mark and the 10-day moving average hold as support. Below this area isn’t the end of the world, as Zoom should find support between $455 and $475. However, it will be disappointing for trend traders.
DraftKings (DKNG)
Click to Enlarge
DraftKings (NASDAQ:DKNG) just can’t get off the mat. Once on an unstoppable run, shares have declined in seven of the last nine trading sessions. However, is the decline about to end?
It’s not a guarantee, but a speculator might fancy his odds at a dip-buy around current levels. Shares are pulling back right into the 50-day moving average and the prior June high.
It might only be good for a few points to the upside, but nonetheless makes this a reasonable spot to consider a long position given the immediateness of seeing whether the 50-day holds or fails.
On the upside, I’d like to see a rebound toward $50 and the 20-day moving average. Above could put $55 in play, but let’s not press our luck. Let’s also make sure support holds before we start talking about how much upside could be there.
Vertex Pharmaceuticals (VRTX)
Click to Enlarge
Vertex Pharmaceuticals (NASDAQ:VRTX) was a favorite among biotech investors, as shares have rallied hard over the past year.
Thursday was not the day for a victory dance among bulls, though. Shares were down more than 20% at one point, although investors did step in and bid the stock up off the lows.
For many — including me — this feels like a no-touch at the moment. For interested bulls, though, a sustainable move up through the 23.6% retracement could trigger a long entry.
That would allow investors to put their stop-loss just below Thursday’s low and look for a rotation through Thursday’s high. Above the high (at $232.46) and we may see this name press higher.
Ideally, we could get a test of the $255 to $260 area, and a retest of the 200-day moving average. The 200-day has been a notable support level this year, by the way.
On the downside, a sustained move below Thursday’s low puts the March low in play near $200.
GameStop (GME)
Click to Enlarge
GameStop (NYSE:GME) continues to make powerful moves to the upside, with Thursday’s 21.5% rally displaying that recent strength.
The roadmap is pretty simple if we zoom out to the weekly chart. A close above last week’s high (at $14.80) puts the $16 mark in play. This level has been significant for years now.
On the downside, bulls need to see the $11 level hold as support. Below puts it below this week’s low and the 200-week moving average.
It also drops GameStop below a notable level from the past few weeks and would put the 10-day moving average on the table.
On the date of publication, Bret Kenwell held a long position in DKNG.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
