The S&P 500 hit new all-time highs as equity markets continue to grind higher. That said, let’s look at a few top stock trades as we approach Friday and a quadruple witching expiration day — one of four throughout the year.
Top Stock Trades for Tomorrow No. 1: FedEx (FDX)
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FedEx (NYSE:FDX) will report earnings after the close, and it’s got investors on their toes.
Rhymes aside, what can we expect? A binary event like earnings is hard to trade, simply because the moves tend to be big and are impossible to consistently predict. While it’s hard to imagine FedEx reporting poor results at a time like this, the stock has already been a monster.
Before its recent consolidation between $250 and $295, it rallied in 15 of 16 weeks. The one down week during that stretch saw FDX stock shed 0.5%. So it’s been a beast.
If the reaction is bullish, look for a move up through the 123.6% retracement near $305. This mark was resistance last week. Above that could eventually put the $370s in play, where FedEx will find the 161.8% extension.
If the reaction is muted, though, look for shares to hold the 10-week moving average. That would bode well for bulls, given that after Friday’s close we’ll have another weekly candle to work with on the chart.
If the reaction is bearish, look for the $250 to $260 area to act as support. If FedEx loses the 10-week moving average, this zone may be the ideal buy zone for investors.
Top Stock Trades for Tomorrow No. 2: Netflix (NFLX)
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Big tech has been lulled to sleep over the past few months. And with just a couple of weeks left in the year, it would be a perfect time for FAANG to wake up.
Netflix (NASDAQ:NFLX) has been leading the early charge. Shares gave us a weekly-up rotation on Monday, consolidated on Tuesday, then took out the highs on Wednesday.
From here, I’d love to see a push up to range resistance near $550 to $560. Above could put the all-time highs in play near $575, which has been resistance twice now.
On the downside, however, a break of last week’s high and the 10-day moving average does not bode well for bulls. A break of uptrend support, last week’s low and and the 50-day moving average could put range support back in play near $470, along with the 200-day moving average.
Top Stock Trades for Tomorrow No. 3: Jabil Circuit (JBL)
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In late October, Jabil Circuit (NYSE:JBL) gave investors a fake out by closing below the 200-day moving average. However, the next session resulted in a bullish engulfing candle, as shares erupted to life.
Known in the trading community as a “look below and fail” — because the stock “looked” below support and ultimately “failed” to break down — this bullish pattern can often mark reversal points.
For JBL stock, shares are now popping on earnings, despite already enjoying big gains over the last six weeks or so.
From here, I’d love to see the stock hold up over the $43 area, which marked the prior highs from January. Below puts the 10-day moving average in play as possible support. On the upside, look for a continued push higher to the 123.6% extension (for the entire 2020 range).
If it can get there, Jabil will be near $50 per share.
Top Trades for Tomorrow No. 4: Accenture (ACN)
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Accenture (NYSE:ACN) is also rallying on earnings, with the stock up about 7% on the day but near its session low.
Let’s see if ACN stock can hold above the 161.8% extension by the end of the week. If it can, let’s see if it can take out its newly established 52-week high at $271.08, allowing it to potentially climb to the two-times range extension at $292.08.
If it fails to hold the 161.8% extension, let’s see if this one can hold last month’s high near $251, as well as the 10-week moving average.
On the date of publication, Bret Kenwell held a long position in NFLX.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
