It was another quiet day in the market before the major indices faded into the close. That said, let’s look at a few top stock trades as head into the last trading day of the week.
Top Stock Trades for Tomorrow No. 1: Intel (INTC)
Intel (NASDAQ:INTC) burst higher on Wednesday on news it would change its CEO, but it gave up a bulk of those gains by the close. On Thursday, shares ramped back higher.
On the rally, Intel couldn’t take out the week’s high, though.
After an inside day — where the session range is within the prior session’s range — we have a great setup. On a move over the two-day high and the 61.8% retracement, investors can look for more upside above $60. Potentially, $64 could be in play.
On the downside, however, a break of the two-day low could put $54 to $55 back in play. There are a number of key support areas near this zone, so one would expect it to hold up on the first test. If it doesn’t, around $50 could be on the table, along with the 10-week moving average.
Top Stock Trades for Tomorrow No. 2: Lemonade (LMND)
I like Lemonade (NYSE:LMND), but the stock has rallied too far, too fast.
Shares surged into December, coiled into a tightened wedge and resolved with an upside breakout. The move sent the stock up toward $185. However, this area has been resistance for three-straight sessions.
Along with its undeserved valuation, it was one reason I was looking for the stock to correct. The stock was pressured on news of its secondary offering, then Citron Research said it should trade back down to $100.
All of this is playing out in today’s price action. If Lemonade takes out the low, look for a test of the 10-day moving average. Below puts the 21-day moving average and the December high near $138 in play. If the stock really starts to crack, the 10-week and 50-day moving averages could be on the table.
On the upside, however, taking out the high near $188 could put $200 and the three-times range extension in play.
Top Stock Trades for Tomorrow No. 3: Wells Fargo (WFC)
Wells Fargo (NYSE:WFC) will report earnings on Friday, and the bank has been trading pretty well ahead of the event. Look at the strong, steady rise since late October.
There are a few levels to watch on the upside and a few on the downside. Both could take a little while to achieve, with earnings potentially being the deciding factor on the trend.
Now through $34 resistance, look at $36.33 as one upside target. That fills one of the March gaps. The next is up at $38.50, where Wells Fargo also finds the declining 100-week moving average.
On the downside, though, a pullback to the 21-day moving average and $31 could eventually be in the cards. A tag of the latter will fill the most recent gap from earlier this month. Should Wells Fargo lose the 10-week moving average, the 100-day and 200-day moving averages could be on the table near $26.
Top Trades for Tomorrow No. 4: Small Caps ETF (IWM)
The iShares Russell 2000 ETF (NYSEARCA:IWM) has been on a tear. It’s been the relative strength leader for quite some now when it comes to the other U.S. indices.
Up big on the day Thursday, it again showed that strength.
The IWM gave us a huge move last week and the rally continued into this week. Now though, it’s approaching the 161.8% extension from the March low to preceding all-time high.
Not that that’s the end-all, be-all for the IWM and it’s set to top forever. But I wouldn’t be surprised to see the IWM rest a bit.
Until things change, we want to be buyers of the dip. But it pays to know where it’s prudent to reduce risk.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.