After a powerful snap-back rally on Monday, bulls followed through on Tuesday. They now sit in the driver’s seat with plenty of earnings coming up. That said, let’s lead off with an earnings candidate in our top stock trades.
Top Stock Trades for Tomorrow No. 1: Alphabet (GOOGL, GOOG)
Can it continue its winning ways, though?
Shares made new highs, albeit barely, on Tuesday ahead of its earnings report after the close. That would suggest that expectations are elevated. So far, Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) have reported strong results, but they haven’t really been rewarded.
If this time is different, look for a move up to the $2,000 mark. Above put the 161.8% extension from the recent range in play near $2,015, while the two-times range extension from the Q1 correction is up near $2,050.
If GOOGL is hot, hot, hot after the print, it could kickstart a larger time-frame rally up to the 261.8% extension near $2,375. But let’s not get ahead of ourselves.
Admittedly, shares are running into channel/uptrend resistance. That to me is less relevant than the actual earnings, but we’ll see. If Alphabet fades after the print, this resistance mark will look pretty notable.
If GOOGL does retreat, however, there are three levels on my radar: the $1,785 to $1,815 area, the $1,650 to $1,675 area and the $1,530 to $1,570 zone. All three are highlighted on the chart above.
Top Stock Trades for Tomorrow No. 2: JPMorgan (JPM)
When the banks were gearing up for earnings, we were talking about expectations being too high with the strong rallies. Just look at how JPMorgan (NYSE:JPM) flew higher into the print.
Even though the results were good, we had a sell-the-news reaction. Particularly with the banks, that’s hardly surprising.
Shares found their footing at the 10-week moving average and the breakout level from earlier in the year. Now JPM is trying to reclaiming the 21-day moving average. If it can get above and stay above that measure and the $134 mark, a retest of the $141 area is on the table.
If it can’t, look for a possible gap-fill to $130. Below puts the 10-week and 50-day moving averages back in play.
Top Stock Trades for Tomorrow No. 3: Aphria (APHA)
Aphria (NASDAQ:APHA) is moving to a multi-year high on the day, powering through a tight consolidation after a big run.
We had our eye on the 61.8% retracement, which was resistance for three straight weeks in January. Notice how the candles “wick” above this mark, but failed to close above it.
The candles also formed a tighter and tighter range — known as a wedge.
With an upside break of this wedge, bulls are looking for the momentum to continue in Aphria. If it does, it could put the $16 level in play. That was clear resistance in 2018, while the 78.6% retracement comes into play at $16.03.
On the downside, though, I want to see the stock hold the 61.8% retracement. A break of this week’s low would be very discouraging.
Top Trades for Tomorrow No. 4: Tilray (TLRY)
Tilray (NASDAQ:TLRY) shares are rallying on the day too. Like Aphria, the stock had a large rally followed by a tight consolidation.
Shares were being weighed down by the 100-week moving average, but used Tuesday’s rally to push through this mark.
Now it’s hitting the 2020 high at $22.95. And if TLRY can power through this mark, the 161.8% extension from the recent low to the January high comes into play at $26.81.
On the downside, however, I want to see TLRY continue to hold its 10-day moving average. Below could open up a test of the $15.50 area and the 10-week moving average.
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.