After a strong day on Monday, it was a relatively quiet session on Tuesday, despite indices making new highs in the morning. That said, let’s look at a few top stock trades for Wednesday.
Top Stock Trades for Tomorrow No. 1: Amazon (AMZN)
Look at the two-day move we have brewing in this name after months of tightening price action. Of course, it’s coming as concerns linger over the longevity of the Nasdaq’s rally.
I can tell you right now that if big tech — FAANG plus Microsoft (NASDAQ:MSFT) — take on a leadership role after months of passive price action, the Nasdaq will be just fine.
For Amazon, it’s simple. The next upside level comes into play at the November high near $3,667. Above that opens the door up toward $3,500.
On the downside, though, it needs to hold the $3,170 area, where it has the 50-day and 100-day moving averages, as well as uptrend support (blue line). Below puts the December and November lows in play near $3,072 and $2,950, respectively.
Top Stock Trades for Tomorrow No. 2: Netflix (NFLX)
However, the stock quickly ran out of gas afterwards, pulling back toward $507 and holding uptrend support in the process. Below would have put the 50-day and 100-day moving averages in play near $500.
Instead of testing that area though, shares reversed higher, reclaimed the 10-day moving average and threatened a rotation over this month’s highs.
Let’s see if it can clear $536.37. Above will put $550 to $560 in play, followed by the double-top up near $575.
Top Stock Trades for Tomorrow No. 3: Square (SQ)
Lately there has been a rotation out of high-growth stocks into the mega-cap tech stocks (as highlighted above). Whether this is a multi-day or multi-week rotation, we do not know.
However, we do know that among those growth stocks, investors are selling Square (NYSE:SQ). Working on its fourth straight decline, SQ stock is getting roughed up.
In the process, it’s losing its 10-day and 21-day moving averages. I would love to see a deeper washout. For instance, a dip to the 50-day moving average and to the $195 to $200 area. That area should provide a bounce if Square gets there.
If bulls step in before that, let’s see if they can reclaim the $220 level and the 10-day moving average.
Top Trades for Tomorrow No. 4: Intel (INTC)
There has been very little love for Intel (NASDAQ:INTC), except for when it dips into the $42 to $44 zone. In that area, bulls continue to bid up the struggling semi stock.
With this week’s spark, shares are rallying off the 200-week moving average and reclaiming the 10-week moving average.
From here, we need to see INTC stock take out the December high at $52.65 and downtrend resistance. Above that puts the 50-week moving average in play, which was resistance in October.
Above that, and the key $56 area is in play.
On the downside, however, it’s hard to risk $4 per share here. However, we need to see INTC stock hold last week’s low at $45.24. Below that mark not only creates a bearish rotation, but also puts it below the 200-week moving average.
That could put the $42 to $44 area back in play.
More conservative bulls may consider using the November high near $48.50 and the 10-week moving average as their risk point, rather than $45.24.
On the date of publication, Bret Kenwell held a long position in AMZN.