After its first somewhat meaningful dip amid this record run, stocks bounced back on Thursday. That said, let’s look at a few top stock trades as we approach the last trading day of the week.
Top Stock Trades for Tomorrow No. 1: Virgin Galactic (SPCE)
Click to Enlarge
As a top speculative holding, Virgin Galactic (NYSE:SPCE) has had some moments of glory. Its share price can gain unsuspecting momentum, sending the stock price rocketing higher.
However, it’s also prone to prolonged slumps, like the one we’re experiencing now.
After sitting on the 200-day moving average for three straight sessions, shares plunged below this measure on Thursday. It also broke below the 50-week moving average and the March low at $23.94. It’s hard to be long here unless SPCE stock can reclaim a few of these key measures, starting with $24.
In the short-term, it feels like the stock is stuck in no man’s land. It could sink to $20 from here, or even down toward $17 — which is near the fourth-quarter low.
From here, let’s either wait for a tradable bounce — where SPCE stock reclaims a key level or two and gives investors a defined low — or a deeper dip to lower our risk.
Top Stock Trades for Tomorrow No. 2: Churchill Capital (CCIV)
Click to Enlarge
Churchill Capital (NYSE:CCIV) is also trading poorly on the day, down about 7.4% on Thursday. Shares are cracking below the 100-day moving average on the dip.
Perhaps more importantly, CCIV stock is also testing down into a key support area near $20.50. The fear here is that with a series of lower highs squeezing the stock lower, that this support level will fail.
If that’s the case, we have to have sub-$20 on our radar, (as well as the idea that $20.50 may become resistance).
On the upside, however, I want to see CCIV stock reclaim its 100-day moving average. That puts a quick potential trade up to its 21-day and 10-week moving averages in play in the $24 to $24.50 range. Above that could open the door to $30.
Top Stock Trades for Tomorrow No. 3: PepsiCo (PEP)
Click to Enlarge
About flat on the day, and PepsiCo (NASDAQ:PEP) is having a pretty muted response to earnings. That’s fine by me, at least when looking at its weekly chart.
Look at how tight this chart is getting as PEP stock is essentially giving us back-to-back inside weeks. I would love another calm close on Friday, setting us for a potentially larger move next week.
That comes to fruition with a two-times weekly-up or a two-times weekly-down rotation.
So what does that mean, exactly? It’s simple.
A weekly-up rotation simply means the stock is taking out the prior week’s high. Adding a “two-times” to that rotation means it’s taking out the highs from the last two weeks.
Because of PepsiCo’s tight trading range, I’m looking for a break of this range, with a bias to the upside.
The bias is higher for two reasons. First, the stock is setting up in a bullish manner, with the pattern looking like a bull pennant or flag setup. Second, if we get a weekly-down rotation, potential support is very close, which limits our reward. The upside has fewer hurdles and thus, a more attractive reward.
Top Trades for Tomorrow No. 4: Plug Power (PLUG)
Click to Enlarge
Plug Power (NASDAQ:PLUG) has been absolutely decimated since its bullish setup fell apart in February.
While shares broke below the 200-day moving average, the 50-week moving average is coming into play now. Investors can use Thursday’s low as a reference point to trade against.
Below $23.90, and PLUG stock could continue to crumble.
On the upside, though, I want to at least see a quick recovery to the 200-day moving average near $28. Above that puts $30 and the 10-day moving average in play. If we get that move, we can re-evaluate its strength at that time.
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.
