After a few warning signs over the past week, the markets finally paid the price. The S&P 500 ended the day down about 2.6% as stocks slipped lower. That said, let’s look at a few top stock trades for Thursday.
Top Stock Trades for Tomorrow No. 1: BlackBerry (BB)
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The epic short squeeze we’re seeing in a handful of stocks is truly something to behold. But I’m not going to get too into it here. I will look at BlackBerry (NYSE:BB) though.
Does this sound right to you? BlackBerry is working on its ninth straight daily rally and at its high on Wednesday shares were up more than 50% for the day. From the start of this nine-day rally, shares were up almost 300% at today’s high.
As entertaining as some of these names have become — like GameStop (NYSE:GME) — it’s not healthy price action.
BlackBerry ran right into its long-term VWAP measure and the 200-month moving average on Wednesday and stopped dead in its tracks. Use extreme caution with these names going forward.
Below $17 and the 10-day moving average (currently near $16.50 but rising quickly), and this one can unwind in a hurry. Over the 200-month and $30-plus could be next. Remember, there’s nothing wrong with just being an observer.
Top Stock Trades for Tomorrow No. 2: Microsoft (MSFT)
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Microsoft (NASDAQ:MSFT) reported a blowout quarter, but the stock struggled to gain traction on the day.
That’s likely due to the selloff in the overall market and the fact that shares were up for six-straight sessions and at new all-time highs going into the print.
From here, watch the 161.8% extension. This area was stiff resistance for months. It would be very constructive to see it act as support, along with the 10-day moving average. Below could put the 100-day moving average on the table.
On the upside, though, a move through Wednesday’s high near $240.50 puts the $250 to $255 area in play.
Top Stock Trades for Tomorrow No. 3: Abbott Labs (ABT)
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Abbott Labs (NYSE:ABT) also had trouble on the day, despite notching new highs on earnings.
From here, let’s keep it simple. Over the high and investors can see the stock can squeeze out a move to the $120 to $123 area. The two-times range extension comes into play near the high-end of that zone.
On the downside, however, a break of the $114 level and the 10-day moving average puts the 50-day and 100-day moving averages on the table.
Top Trades for Tomorrow No. 4: Texas Instruments (TXN)
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Texas Instruments (NASDAQ:TXN) shares couldn’t help but stumble after earnings. However, unlike Abbott and Microsoft, shares actually declined rather than just struggled to hold onto any gains.
The stock ended Wednesday down nearly 5%, thrusting it right into the 50-day moving average.
If it holds as support — just as it has over the last few months (with a little wiggle room) — see if TXN stock can rebound back over $170 and fill its earnings gap.
If it can’t hold the 50-day, then perhaps a test of $160 is in the cards. Below that will put the 100-day moving average on deck.
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.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
