Stocks were sold at the open on Monday, starting off the week on the wrong foot. Can the market recover or does it need more time to consolidate? That said, let’s look at a few top stock trades.
Top Stock Trades for Tomorrow No. 1: S&P 500 ETF (SPY)
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So what’s going on in the market? Well, let’s look at the SPDR S&P 500 Trust ETF (NYSEARCA:SPY) to get a better idea.
Shares traded down into the two-times weekly low near $386 and the 21-day moving average. So far, bulls are buying the dip, but they’re not doing so robustly. This is also the breakout spot from the January highs.
The SPY has traded well this year, but it could be getting tired after so much upside and so little downside follow-through.
Should it break $386 and the 21-day moving average, the 50-day moving average will be in play. Below that puts the January low on the table near $368, as well as the 100-day moving average.
On the upside, though, bulls need to reclaim the 10-day moving average, putting the current all-time high in play at $394.17, followed by $400. So far, things seem routine. We lack large downside volume days and huge spikes in the volatility index. Panic isn’t in the air, not yet anyway.
Top Stock Trades for Tomorrow No. 2: Disney (DIS)
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Disney (NYSE:DIS) reported great earnings and hit new highs on the print, but faded from those levels almost immediately.
It took a little more than a week to shake out, but the stock is now finding its footing. From here, I want to see a rotation over the post-earnings high at $193.85.
Above that will put the 161.8% extension of the larger range in play near $199, and thus, it will put $200 on the table as well.
On the downside, however, I want to see the 10-day moving average hold as support. Below puts the 21-day moving average on the table, followed by that four-day post-earnings low in the low $180s. I would really like to see this area hold as support. If it doesn’t, we’ll need to re-evaluate.
Top Stock Trades for Tomorrow No. 3: Spotify (SPOT)
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Spotify (NYSE:SPOT) has gone from one to range to the next, but it’s trying to break out as we speak.
Last week, Spotify was building just above resistance at $350, then fired higher on Monday. So far, the two-times extensions from both the short- and long-term range are acting as resistance, (with SPOT hitting the short-term two-times extension almost to the penny).
This stock has traded the recent range extensions quite technically (drawn in blue). From here, l want to see Spotify close over the prior high and 161.8% extension near $372.
Above keeps this week’s high in play near $387. Above that puts the $400 mark and 261.8% extension on the table.
On a dip, though, see that the 10-day moving average holds as support. Below could put the $340 area on the table.
Top Stock Trades for Tomorrow No. 4: Dish (DISH)
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After getting hammered in the first quarter of 2020, Dish Networks (NASDAQ:DISH) has been rangebound. The stock has spent most of its time bouncing between $27 and $37.
Late last week, Dish burst over the January high and 61.8% retracement. Now, the latter is acting as support along with the 10-day moving average.
This isn’t the end-all, be-all level. However, that near-$32.90 area is a short-term line in the sand. Below it will put its cluster of major moving averages in play around $31.
Over last week’s high (at $34.81) and perhaps we can see a move up toward $37 resistance. That’s the big level to watch, as it has kept a lid on Dish for months now. Over $37.50 could put $40 in play, followed by the high at $42.62.
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.
