It was another quiet day in the market as we near the last trading day of 2020. That said, let’s look at a few top stock trades for Thursday, the last session of the year.
Top Stock Trades for Tomorrow No. 1: Bitcoin (BTC)
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Bitcoin (CCC:BTC) has been on fire lately, and the crypto bulls are loving it! Just as they should.
The cryptocurrency has been wavering a bit over the last few days, but ultimately powered through to new all-time highs on Wednesday.
I’ll be honest, I’m not the biggest bitcoin believer out there. But, I’m not afraid to be bullish when the charts call for it and I love that it trades very technically.
Just look at the way that BTC has respected the levels on the chart. It had a rally to the 161.8% extension, and then backed off. It rallied to the two-times range extension and paused before breaking out. Now racing higher, I fully expect bitcoin to come close to or exceed $30,000 — the 261.8% extension.
On a break of the 10-day moving average, the $24,000 level is back in play, followed by $20,000 and the 50-day moving average.
Top Stock Trades for Tomorrow No. 2: Alibaba (BABA)
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Alibaba (NYSE:BABA) has been a volatile one lately, plunging last Friday to a low of $211.23 before reversing. By the way, that area — $211.70 — was a major multi-year high from 2018.
I thought the selloff was a bit ridiculous, given that the company is a complete juggernaut. But that’s neither here nor there.
We’ve had a strong bounce in the name after three strong rally days. Alibaba is now meeting resistance from the 10-day moving average. If it can clear this mark and the 200-day moving average, look for a gap fill up toward $253.
Over the gap fill, and we will need to see some rotations take place, preferably over the December high.
On the downside, though, a break of $230 could put $222 on the table, followed by a retest of the lows.
Top Stock Trades for Tomorrow No. 3: FuboTV (FUBO)
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FuboTV (NYSE:FUBO) has also been all over the place, now down almost 50% from its highs on Dec. 22, after five straight declines. This one is troublesome, though.
Even without the short reports, I don’t love the action.
I usually love when strong stocks pull back into the 10-day moving average, just like FUBO stock did. However, it then gapped below the 10-day moving average on Monday.
It stayed below this measure for two straight sessions. A rotation back up would have been constructive — even bullish. But instead it broke the two-day low and is now dipping below the 21-day moving average.
If it can’t hold current levels, $30 could be in play, followed by the 50-day moving average. If Fubo reclaims the 21-day moving average, see that it recaptures that two-day low, then retests the 10-day moving average. Over $40 is bullish and puts a gap-fill in play.
Top Trades for Tomorrow No. 4: Nio (NIO)
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This little firecracker continues to trade quite well. It’s like a technician is orchestrating the moves in Nio (NYSE:NIO) and with the market pulling the strings, it very well could be due to overwhelming technical analysis.
The stock bounced hard off the 50-day moving average on Tuesday, it’s first test in months. In doing so, it posted a strong reversal and reclaimed the 10-day and 21-day moving averages, albeit, barely.
It then extended those gains on Wednesday.
I now want to see the stock rotate over last week’s high near $50, opening up the $55 to $57.50 area as a possible upside target. A drop below the 10-day moving average puts the 50-day back in play.
On the date of publication, Bret Kenwell held a long position in BABA.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
