After a tough session on Monday, stocks bouncing back on Tuesday. With the election just a few weeks away and with stimulus headlines consistently jarring the market, trading has become very choppy. With all that in mind, let’s look at a few top stock trades for Wednesday.
Top Stock Trades for Tomorrow No. 1: Logitech (LOGI)
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Logitech (NASDAQ:LOGI) shares are bursting higher on robust volume after better-than-expected earnings.
The results were robust and enough to propel Logitech up over $82 resistance. Now we have the stock sitting between a few key marks.
On the upside, I want to see if LOGI stock can climb to the 361.8% extension at $99, then of course the key $100 mark. Given the strength of the recent report and the guidance, a push to this area certainly isn’t out of the question.
On the downside, though, I don’t want to see LOGI stock break the three-times range extension near $86. Below puts $82 resistance back in play and if the selling really picks up, $75 support could be next. However, we would likely need a major market correction to get there.
Top Stock Trades for Tomorrow No. 2: Philip Morris (PM)
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Philip Morris (NYSE:PM) is also trading on earnings Tuesday morning. Rather than a robust move to the upside though, shares are moving lower and clinging to support.
In October, the stock couldn’t gain momentum over $80, which acted as a lid of resistance. With its failure to clear this level, PM stock put in a lower high.
With earnings, shares lost the 50-day moving average and are now trying to hold the 100-day and 200-day moving averages. This area near $75 is important, but so is the one just below it between $73.50 and $74.
There PM stock finds this month’s low and the 61.8% retracement. A close below this mark could accelerate the selling pressure in PM stock, potentially putting the $67 to $68 area in play.
On the upside, see if the $75 level holds. If so, look for a bounce to the 50-day moving average, then potentially $80.
Top Stock Trades for Tomorrow No. 3: Verizon (VZ)
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Verizon (NYSE:VZ) is set to report earnings on Wednesday before the open. Shares looked a lot better about a month ago, but have struggled more recently.
If VZ finishes lower on Tuesday, it will mark its sixth straight daily decline. However, the dip helps the stock shed some risk into a big event.
If the reaction is bullish, I want to see shares bounce off the 100-day moving average and trade up into the $59 to $59.50 area. There Verizon will find the 50-day moving average and downtrend resistance. Above this zone puts $60 resistance in play.
Over $61 could kickstart a breakout rally.
On a bearish reaction, let’s see where support comes into play. Between $54.50 and $56, Verizon has the 200-day moving average, 61.8% retracement and the backside of prior downtrend resistance (in that order). Below all of them could put $52 to $53 on the table.
Top Trades for Tomorrow No. 4: iRobot (IRBT)
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For iRobot (NASDAQ:IRBT), I wanted to use the monthly chart. The stock is trading well with earnings due up on Tuesday after the close.
With the move, shares are trading up into the 61.8% retracement, which is measured from the 2020 lows to the 2019 highs.
On a bullish reaction, I want to see IRBT stock build above the 61.8% retracement, eventually pushing through $100 and challenging the 78.6% retracement near $111.50.
On a decline, it would be encouraging to see shares hold the $85 to $86 area as support. In three of the past four months, shares were unable to close above this zone on a monthly basis after trading above it at some point during the month.
A break of the 50% retracement near $83 could put the mid-$70s in play, along with the 10-month moving average.
Top Trades for Tomorrow No. 5: Abbott Labs (ABT)
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Abbott Labs (NYSE:ABT) continues to trade higher in a slowly but surely manner.
For instance, in July the stock broke out of its bull flag pattern (purple lines), then formed an ascending triangle pattern before breaking out over $102.50. Ultimately Abbott did so on a big gap-up, but failed to hold those gains as the 161.8% extension near $110 held as resistance.
There now, investors want to see ABT clear this mark on earnings, scheduled for Wednesday before the open. They will also want to see ABT close above the current high, at $113.84. That will put the two-times range extension in play at $122.30.
On the downside, I mostly want to see shares close above $100 if the reaction is bearish. A shallower dip is of course better.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
