While the last two days have been relatively quiet, bulls are wondering if sellers will step in and punish the indices as the Federal Reserve releases its FOMC Minutes update. That said, let’s look at a few top stock trades as we enter the last few days of the week.
Top Stock Trades for Tomorrow No. 1: Snap (SNAP)
Snap (NYSE:SNAP) has been trading incredibly well lately, tacking on nearly 6% on Wednesday.
The stock used today’s rally to push up through downtrend resistance and the 50-day moving average. It’s now above all of its major moving averages.
Shares did a great job holding the $48 level in late March and have come back with a vengeance since. From here, it’s okay if Snap consolidates a bit. However, I want to see if we can push up to the $65 area. That has been resistance with the exception of that late-February surge.
Above $65 opens the door to the 52-week high, near $73.50.
On the downside, however, a move back below the 10-day and 21-day moving averages saps a lot of momentum from this name.
Top Stock Trades for Tomorrow No. 2: Advanced Micro Devices (AMD)
Range support continues to hold near $74, as this level was tested earlier in the month. AMD stock then put in a higher low before going on a five-day winning streak. We’re in an interesting spot now, though.
Shares are rallying right into the 10-week moving average, with the 50-day moving average just above that. On the flip side, we have the 10-day and 21-day moving averages below.
A move below the $80 level could sap some momentum here, potentially putting $75 back in play. Above the 50-day moving average opens the door to $87, which is a former range resistance level and the 100-day moving average.
In a mixed picture like this, use the key moving averages to help guide the direction. As a general rule of thumb, I default to the higher timeframe moving averages as having precedence.
Top Stock Trades for Tomorrow No. 3: Twitter (TWTR)
Sticking with some social media plays, Twitter (NYSE:TWTR) has been looking much better on the long side too. As a result, it’s riding an eight-day win streak.
Unlike AMD stock, Twitter doesn’t have much in the way of overhead resistance. At least when it comes to the moving averages.
On the downside, I want to see that the trifecta of moving averages — the 10-day, 21-day and 50-day moving averages — act as support.
On the upside, however, let’s see if shares can push up to the 261.8% extension. This level has been like a line in the sand. Above it opens the door to the 52-week highs near $80.
Top Trades for Tomorrow No. 4: Russell 2000 ETF (IWM)
Ahead of the Fed, it was an incredibly quiet day. The other major indices were mostly unchanged, while gold, oil and volume breadth were also pretty muted. That is, almost everything except the Russell 2000 and as an extension, the iShares Russell 2000 ETF (NYSEARCA:IWM). This was one was getting hammered.
In my opinion, the futures offered a bit of a cleaner look than the IWM, but the IWM is more accessible to most investors, so let’s stick with that one.
Seeing as though it was the weakest in the bunch, it’s totally possible that it remains the weakest of the bunch and continues lower. However, we’re entering a solid risk/reward zone for short-term longs.
That’s as we approach the recent breakout level over $221, as well as the 10-day, 50-day and 10-week moving averages. If these levels fail, then there could be room down to the $214 to $215 area, followed by the 100-day and 21-week moving averages.
On the upside, though, look for a move back toward this week’s high near $226.50. Above that puts the $230 to $234 zone in play.
On the date of publication, Bret Kenwell held a long position in the IWM and AMD.