Wednesday will be the last full trading session of the week, as investors begin to turn their focus to turkey, football and Black Friday deals. Let’s look at a few top stock trades ahead of the long weekend.
Top Stock Trades for Tomorrow No. 1: Tesla (TSLA)
Click to Enlarge
Tesla (NASDAQ:TSLA) just continues its grind higher, up another 6.4% on the day. That followed Monday’s move to new all-time highs.
The breakout in this name was pretty clear. Higher lows led by uptrend support (blue line) kept Tesla afloat until positive news — being added to the S&P 500 Index — was enough to trigger a big-time breakout.
Now, let’s see if shares can climb to the 161.8% extension (measured from the September low to the September high). That comes into play near $609.
On the downside, though, I would like to see the prior high near $500 act as support. The must-hold support level is prior resistance though, which comes into play near $460.
Top Stock Trades for Tomorrow No. 2: Disney (DIS)
Click to Enlarge
Shares of Disney (NYSE:DIS) have done a great job of consolidating the recent gains and moving higher this month. Now, though, we are coming into potential resistance.
The stock is trading up into the all-time high from last November. Should resistance hold firm, I would like to see the $145 to $147 area come into play as support.
It’s a long ways down. But, ultimately, if Disney can hold its post-earnings low near $134, the gains are pretty healthy given the climate. If it loses that level, a gap-fill near $127.50 could be in play.
On the upside, however, a breakout over the $152.50 highs could put the 123.6% extension in play (measured from the March low to the 2019 high). That’s up at $169.82.
Top Stock Trades for Tomorrow No. 3: Abercrombie & Fitch (ANF)
Click to Enlarge
We’re using a weekly chart for Abercrombie & Fitch (NYSE:ANF), which has been red hot from its summer lows. Shares have more than doubled since then, and are adding to those gains on Tuesday after earnings.
Above major prior resistance at $18, but still a long way from multi-year resistance between $26 and $27, this one is a tough name to jump on if an investor isn’t already long.
For me, I am either looking for a massive pullback or a big squeeze higher.
If it’s the former, look to buy the dip either on a retest of the 10-week moving average or the $18 level. On the upside, I am a potential seller between $26 and $27, with our risk point being just over the 2019 high near $29.
Top Trades for Tomorrow No. 4: Best Buy (BBY)
Click to Enlarge
Let’s look at two more retailers that reported earnings on Tuesday, starting with Best Buy (NYSE:BBY).
Technically speaking, the stock is holding right where it needs to. That’s channel support and the 50-day moving average. I’m not a big head-and-shoulders trader, but the signs are clearly there (purple lines).
That’s got me a little cautious. I would feel better about BBY stock if it could reclaim the 50-day moving average. If it can, it at least gives us a level to measure against. In that scenario, see that BBY stock holds the post-earnings low from Tuesday.
A move below puts the October and November lows in play, at $109.60 and $110.92, respectively. Below that could put the 100-day moving average in play, followed by the $103 to $105 area.
On the upside, though, let’s look for a gap-fill back toward $120, followed by a retest of resistance near $123.
Top Trades for Tomorrow No. 5: Burlington Stores (BURL)
Click to Enlarge
Down nearly 2% on the day, and it’s anything but an end-of-the-world reaction to Burlington Stores (NYSE:BURL) earnings report.
However, the stock is flirting with a loss of uptrend support (blue line). Again, though, it’s not the end of the world if that happens. It will simply put prior resistance in play at $220, followed by the 20-day and 50-day moving averages.
Now a loss of these marks may have investors moving toward the bunkers. It will put the 200-day moving average in play, followed by $190 range support.
But what bulls really want to see is a move over $240 resistance. That will complete the bullish formation and quickly put the 2020 highs in play just over $250.
On the date of publication, Bret Kenwell held a long position in DIS.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
