It was another one of those tough sessions for investors, as the drumbeat of higher interest rates continues to rattle the stock market. That said, let’s look at a few top stock trades in the meantime.
Top Stock Trades for Tomorrow No. 1: Moderna (MRNA)
There’s some good and some bad with Moderna (NASDAQ:MRNA) as the stock reacts to earnings.
On the plus side, it’s holding its 50-day moving average and has all week. On the downside, though, the 10-day moving average rejected the stock (although the overall market selling pressure isn’t helping) — while it also filled the recent gap.
Filling the gap isn’t a negative per se, but some investors — like me — view it as a “job well done” and then requires us to re-evaluate the reaction. So far that reaction has been lower.
So, where now?
The 50-day moving average has to hold. If it doesn’t, this week’s low at $136 remains vulnerable. Below could put the 21-week and 100-day moving averages in play.
Back above the 10-day moving average, however, and the 21-day is in play. Above that puts $178.50 on the table, followed by the highs.
Top Stock Trades for Tomorrow No. 2: Domino’s Pizza (DPZ)
Domino’s Pizza (NYSE:DPZ) is dropping right into the 100-day and 21-week moving averages, falling 7% on the day after reporting earnings.
As you can see by the highlights on the chart, this area has tended to be solid support. If it holds, look for a move back over $350. Above puts the 21-day and 50-day moving averages in play.
Below the 100-day moving average seems interesting too, though. That would put former range resistance near $300 in play and potentially the 200-day moving average.
Top Stock Trades for Tomorrow No. 3: Best Buy (BBY)
Don’t give up on Best Buy (NYSE:BBY) just yet. This is where some of the tricky side of technical analysis can lie.
Okay fine, it’s not that stealthy but it’s the failure to look at multiple timeframes that can give traders false readings.
Shares opened at the 200-day moving average, rallied to the 50-day and 100-day moving averages and were rejected harshly. Now shares are below the 200-day moving average, erasing any confidence the bulls gained in the morning bounce.
I’m not trying to be wishy-washy: This is poor price action and a second bounce isn’t guaranteed. The market weakness doesn’t help matters.
However, notice how the stock is breaking the 200-day moving average. That’s a sell, right? Well, not so fast. Note that the 10-month moving average was recent support in January.
Let’s see if BBY stock can maintain above this mark and the recent support near $100. The tricky part is seeing the 200-day moving average “fail” when really it could be more of an “empty the bus” fake-out low.
Again, I’m not saying that Best Buy will bounce and that the 10-month is guaranteed support. Only that traders looking at just the daily chart may miss this zone. That said, BBY needs to reclaim to the 200-day moving average to have merit.
Top Trades for Tomorrow No. 4: Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) is interesting down here. If the rest of the market comes down hard, Nvidia probably will too. I am admittedly a big-time bull in this name because of its long-term opportunities. However, the company just turned in a monster quarter and finished Thursday down 8.2% despite that.
Shares are now down more than 13% from the recent high after Nvidia temporarily broke out of a long-term consolidation.
Back into the range we go.
For now, Nvidia is holding the 50-day and 100-day moving averages. If it continues to hold, look to see if it can push up through downtrend resistance (blue line) near $575, then range resistance around $590. Over $600 and Nvidia could retest the highs.
However, should Nvidia break the post-earnings low from Thursday, look for a test of the $500 area — the bottom of the range.
Below could put the 200-day moving average in play and potentially the September low near $470 if the selling really picks up.
On the date of publication, Bret Kenwell held a long position in NVDA.