The markets enjoyed a decent rebound on Thursday, as investors sort out the increasing volatility in individual stocks and industries. That said, let’s look at a few top stock trades as we head toward the weekend and the end of the month.
Top Stock Trades for Tomorrow No. 1: General Motors (GM)
General Motors (NYSE:GM) has been trading a whole more like an electric vehicle (EV) lately.
After initially finding the $46.75 area as resistance — the prior high from 2017 — GM stock powered through it earlier this month.
Now wavering, let’s see if GM can hold above $50 and the 161.8% extension. With this week’s pullback, shares filled the gap and bounced. So far, so good.
However, a move back below the 161.8% extension puts the 10-week moving average is in play, along with that $46.75 level I just referenced. Above the current high puts the two-times range extension in play near $58.50.
Top Stock Trades for Tomorrow No. 2: Caterpillar (CAT)
Caterpillar (NYSE:CAT) has come down nicely from its recent high, tagging the 50-day moving average ahead of its earnings report on Friday.
However, it’s sitting in a precarious place. It’s struggling to reclaim a notable VWAP level, while also being rejected by the declining 10-day moving average.
After earnings, bulls will want to see the stock reclaim the 10-day and 21-day moving averages, as well as the 161.8% extension. Above $190 puts the high near $200 in play, followed by a possible push to the two-times range extension.
On the downside, a break of Wednesday’s low could put the $170 mark and the 100-day moving average on the table.
Top Stock Trades for Tomorrow No. 3: Shopify (SHOP)
Shopify (NYSE:SHOP) stock continues to trade very well, in my opinion. After a powerful move higher earlier this year, shares chopped between $880 and $1,100 for several months before breaking out in December.
Twice now, $1,100 has held as support on the pullback, as has the backside of prior downtrend resistance (red line). This time, SHOP also had the 50-day moving average to lean on as support.
From here, bulls need to see Shopify reclaim the 10-day and 21-day moving averages, putting the $1,230 level back in play. Above $1,230 puts the current high in play near $1,285, followed by a possible rally to the 161.8% extension.
On the downside, however, a break of the two-day low puts the 100-day moving average in play. For bulls, they do not want to see this stock fall back into the prior trading range.
Top Trades for Tomorrow No. 4: Mastercard (MA)
By and large, the 21-month moving average has been a guide for this name. Should we get a dip to this level, buyers will likely be able to initiate or add to their longs.
That is the preference on the downside. On the upside, I’m looking for a move over $360, which could put $400-plus in play. Keep it simple.
Top Trades for Tomorrow No. 5: Twilio (TWLO)
On Monday, Twilio (NYSE:TWLO) hit a new all-time high near $404. At its lows on Wednesday, shares were down 18.6%.
That proved to be an opportunity, with shares giving bulls a strong bounce on Thursday. From here though, things get more interesting, as TWLO stock is running right into its 10-day and 21-day moving averages.
If Twilio can reclaim these moving averages, it puts another possible run up toward $400 in play.
If it can’t reclaim these marks, then the 50-day moving average is back in play, as well as the recent $330 lows from Wednesday. Those $330 lows come into play near the big-volume high that the stock registered on Oct. 13.
A break of this level could put the 100-day moving average in play, which has been strong support.
On the date of publication, Bret Kenwell held a long position in TWLO and SHOP.