It’s been another choppy day as the S&P 500 hovers near its new highs but lacks commitment in either direction. Let’s look at a few top stock trades for Thursday.
Top Stock Trades for Tomorrow No. 1: Target (TGT)
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Target (NYSE:TGT) is popping to new all-time highs after better-than-expected earnings.
Although shares are clearing last month’s resistance near $167 and the two-times range extension, Target is also running into channel resistance near $172 (blue line).
If the stock can continue to push higher — either with or without a breakout over channel resistance — look to see if it can climb to the 261.8% extension near $191. Above that, and $200 is in play.
On the downside, though, I want to see the $165 to $167 area hold as support. Below puts the 50-day moving average back in play.
Top Stock Trades for Tomorrow No. 2: Nikola (NKLA)
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Nikola (NASDAQ:NKLA) stock is catching a wave of buying on Wednesday, up 15.4% to end the day. Quietly, this stock has been on fire.
Shares are up four days in a row and in five of the last six sessions. From last week’s low to Wednesday’s high, Nikola is up 41%. With last week’s move, shares broke out over downtrend resistance (blue line). And with Wednesday’s move, NKLA stock is reclaiming the 50-day moving average.
So, now what? I would like to see NKLA stock stay above the 50-day moving average going forward. Below opens it back up to $20 or lower.
On the upside, Nikola could see a difficult test near $28.50. While that represents a bit more upside from Wednesday’s high, it will find the 200-day moving average near this mark, as well as another layer of downtrend resistance.
Above these marks puts the $33 gap-fill in play, as well as the 100-day moving average.
Top Stock Trades for Tomorrow No. 3: Tesla (TSLA)
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Tesla (NASDAQ:TSLA) caught a nice rally on Tuesday, and is continuing the move higher on Wednesday. Yesterday shares burst higher on news that Tesla will be included in the S&P 500.
However, shares couldn’t break out over $460 resistance. Well, at least until today.
Bursting above this level now, look to see if Tesla stock can make another run at $500 and its all-time high near $502. Above opens the door to the 361.8% and four-times range extensions near $518 and $565, respectively.
On the downside, however, I want to see the $450 to $460 area act as support now — allowing bulls to maintain control.
Top Trades for Tomorrow No. 4: Virgin Galactic (SPCE)
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Virgin Galactic (NYSE:SPCE) is trying to move from spec play to investment play — and the stock price shows it.
SPCE stock continues to put in a series of higher lows from the September dip, but it also continues to put in lower highs. This price action is forming a wedge look on the chart (blue lines).
Admittedly, I would have preferred to see the stock holds its trifecta of moving averages — the 50-day, 100-day and 200-day — in late October and early November. Even though that didn’t happen, shares are still trading well on the long side.
With Wednesday’s rally, SPCE is climbing right into wedge resistance. If we can get a push higher from here, it’s possible the stock rotates over last month’s high at $24.37. Not only would that get us a breakout over wedge resistance, but also a monthly-up rotation.
That would put last quarter’s high in play at $27.55 from July. Above that, and — yep, you guessed it — we get a quarterly-up rotation. However, all this starts with a breakout over wedge resistance, which is what investors want to see now.
On the downside, though, I again would like to see the stock’s key moving averages act as support. Below puts wedge support in play, but the stock doesn’t really start to break down unless it loses the November and October lows.
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.
