It was a quiet day on Wall Street, as investors continue to look for post-election direction in the stock market. That said, let’s look at a few top stock trades for Wednesday.
Top Stock Trades for Tomorrow No. 1: Home Depot (HD)
After a robust rebound from the March lows, Home Depot has found itself stuck in a trading range. That’s with resistance at $290 and support at $260.
Even more recently, the stock has been tightening into a wedge pattern (blue lines). As of Tuesday, that wedge is resolving to the downside, as shares flirt with losing the 100-day moving average.
If Home Depot continues lower, bulls may be looking to buy closer to range support. Should $260 give way, the 200-day moving average would be in play.
On the upside, though, it’s hard to get overly bullish on HD stock until it reclaims the 50day moving average. That will put range resistance in play near $290.
Top Stock Trades for Tomorrow No. 2: General Electric (GE)
Despite its questionable fundamentals, General Electric (NYSE:GE) has been trading like a beast lately.
Last week, shares burst higher up toward $9 before consolidating in a tightening trade range. That range resolved higher on Monday and continued higher on Tuesday with a bullish engulfing candle. That’s where the range of the current candle literally engulfs the prior candle’s range.
I want to see now if the stock can clear $10. If it can, it puts $11.25 in play.
Should $10 act as resistance, it wouldn’t be all that surprising, but it wouldn’t necessarily mark the end of the bulls’ trade. As long as it holds last week’s low, GE still looks okay.
Top Stock Trades for Tomorrow No. 3: Macy’s (M)
Like GE, Macy’s (NYSE:M) has been trading much better on the long side.
Last week, Macy’s reclaimed $7.75, but failed to hold that mark while registering a high near $8.75. Macy’s went on to fill the gap and pull back. This week, though, shares are doing much better.
The stock reclaimed the 200-day moving average on Monday, held it on an intraday dip (visible by the candle’s long wick) and then took out last week’s high on Tuesday.
Now at its highest level since June, let’s see if shares can continue to power higher. If so, look for a test of the 38.2% retracement near $9.50. Above that puts the June high on the table around $10.50.
On the downside, however, a break of $7.75 puts the 200-day moving average back on the table, followed by $7.
Top Trades for Tomorrow No. 4: DraftKings (DKNG)
DraftKings (NASDQ:DKNG) has had a rough stretch, just getting absolutely crushed in the month of October. Let’s put it this way, it started the month north of $60 and exited October near $35.
Now, though, the stock is showing some signs of life.
The stock snapped out of its falling wedge look (as we flagged in an earlier Top Stock Trades column), before trading up to $45, the June high and clear resistance. A solid earnings report pushed it over $45 at the open, but the stock failed to close above this mark last week.
Now moving above $45, bulls want to see DKNG stock reclaim the 50-day moving average. If it can, the $50 to $52 area is on the table, the latter of which is the company’s recent secondary offering price.
Above $52.50 puts a gap-fill in play up near $55. On the downside, a move below $45 is concerning. Below the 100-day moving average, and the $35 lows can be retested.
On the date of publication, Bret Kenwell held a long position in DKNG.