The stock market pulled back in late trading on Wednesday, but caught a nice bounce on Thursday. That said, let’s look at a few top stock trades as we go into the last trading day of the week and the market’s monthly options expiration day.
Top Stock Trades for Tomorrow No. 1: Twilio (TWLO)
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How nice has Twilio’s (NYSE:TWLO) recovery been from the backside of prior downtrend resistance?
I flagged that mark right at the beginning of the month, noting that Twilio was pulling back into this spot, as well as the 50-day moving average. The dip resulted in a $30 to $40 bounce, but the stock ended up right back into the zone and the 100-day moving average.
Again, it held and it’s now sending Twilio notably higher. If shares can clear $300, this one may just continue higher once again. Specifically, I want to see if it can take out the November high, which was registered on that first bounce I just referenced.
That would require a rally over $314.74. If we can get it, I want to see if TWLO stock can climb to $340 resistance.
On the downside, though, a close below the 100-day moving average and the November low spells trouble for bulls and puts $220 in play.
Top Stock Trades for Tomorrow No. 2: Snap (SNAP)
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Check out the great-looking chart of Snap (NYSE:SNAP). Shares are starting to find their footing after an excellent, earnings-powered rally from October.
Amid the move, shares are reclaiming the 10-day and 20-day moving average, and rotating over this week’s high.
Up another $1.50 per share will send Snap to $43.50 resistance. That would be a great move, and gives the stock a chance to retest the highs near $46. Ultimately, it would be very bullish to see this name go weekly-up over $44.53 and test that all-time high.
If it can clear both levels, it puts the 361.8% extension in play near $51. On the downside, however, a break of $38.51 forces the bulls’ hand and breaks the long setup in the short term.
Top Stock Trades for Tomorrow No. 3: General Motors (GM)
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General Motors (NYSE:GM) has been trading very well. That action is quite surprising given the headaches it has experienced from the novel coronavirus.
In any regard, the 200-week moving average had been strong support for years leading up to Q1 2020. After losing this mark, it was resistance in September. However, GM was able to reclaim the 200-week in October.
It has been acting as support — which is a very bullish development — before GM broke out over $38 resistance. Another strong week has propelled it over $42 resistance. This level has been multi-year resistance.
So, now what?
Shares are now hitting new highs, and bulls have little reason to bail until support starts to break. I would love to see this name hold $42, but that’s a pretty tight leash. Ultimately, holding $38 bodes well for longs. Below may put the 200-week moving average back in play.
On the upside, though, the 161.8% extension from the March low to the pre-coronavirus 2020 high is north of $50.
Top Trades for Tomorrow No. 4: Jumia (JMIA)
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Jumia Technologies (NYSE:JMIA) has been a volatile stock lately, although the weekly chart doesn’t show much of it.
In any regard, JMIA stock is now trying to take out the August high. If it can do so, $28 could be in play, which was resistance in 2019.
On the downside, I would love to see Jumia hold the $17.50 to $18 aea as support. Below puts the 10- and 20-week moving averages in play. Given the recent strength, I would expect the former to buoy the share price. However, the latter has proven its strength as support over the last few months.
Over $28, and a longer-term push toward $40 could be in the cards.
On the date of publication, Bret Kenwell held a long position in TWLO and SNAP.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
