After a strong run, stocks used Wednesday as another opportunity to take a breather. Indices digested recent gains in a choppy session ahead of this week’s monthly expiration. With all of that in mind, let’s look at a few top stock trades for Thursday.
Top Stock Trades for Tomorrow No. 1: Nio (NIO)
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Nio (NYSE:NIO) was a total beast on Wednesday, rallying more than 22% on the day — and I am really kicking myself with this one.
I was flipping through some charts this morning and came across Nio. It was beautiful. Trending higher, consolidating its recent run to new highs and it had a nice high-and-tight look.
The daily ranges were getting smaller, the lows were getting higher and the 10-day moving average was acting as support. Then I saw the pre-market action, up 10%. Little did I know up 20% was around the corner.
In any regard, with a close over $26.41, see if Nio can press to $30. Above technically puts the 261.8% extension in play. I want to see the prior high — $22.59 — act as support.
Top Stock Trades for Tomorrow No. 2: United Airlines (UAL)
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United Airlines (NASDAQ:UAL) is set to report earnings after the close on Wednesday. Shares continue to struggle with the 10-day and 50-day moving averages.
Last month, UAL stock lost uptrend support (blue line) before ultimately finding support near $32. Since bouncing, that prior uptrend mark is now acting as resistance. If the stock can rally on earnings, I want to see it clear this mark.
Even more, though, I would like to see UAL close above $40. That mark has been notable resistance over the last few months. Above that opens the door to the 200-day moving average, followed by a potential test of the June highs near $48.
On the downside, a break of this week’s low at $35.17 and the 200-period moving average on the four-hour chart near $35 would be a bad look for bulls. It puts $32 back in play, along with the September low at $31.22.
Top Stock Trades for Tomorrow No. 3: Baidu (BIDU)
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Baidu (NASDAQ:BIDU) erupted higher on the day, gaining more than 7% on Wednesday. The move sent shares to its highest point since February.
With that said, Baidu is finding some resistance, too. Shares are being rejected from the $139 level as we speak. If it can hold up around the July highs and stay above the 78.6% retracement near $133 though, I think bulls can stay in control.
Above $139 opens the door to the 2020 high, up at $147.38.
Below $133, and prior resistance near $128 is on the table. Should shares go through a very tough period, look to see that the 200-day moving average continues to act as support.
Top Stock Trades for Tomorrow No. 4: Morgan Stanley (MS)
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Goldman Sachs (NYSE:GS) reported an earnings smasher on Wednesday morning. Given the line of business, I would expect Morgan Stanley (NYSE:MS) to do the same when it reports on Thursday morning.
However, GS stock didn’t get much of a rise, and as a result, Morgan Stanley might not either.
Shares continue to hold up over the 78.6% retracement and the 50-day moving average. On a bearish reaction, see that the 10-day moving average acts as support. Below is a turn off and it will put uptrend support (blue line) in play, followed by the 200-day moving average and the September low near $46.
On the upside, see if shares can rally to and clear $53 resistance. Above puts the September high in play near $54.40, followed by a possible stab at the 2020 highs in the $55 to $56 area.
On the date of publication, Bret Kenwell held a long position in GS.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
