It’s another day of pain for growth stock investors. While growth stocks are getting crushed, the Nasdaq is slightly higher and the Dow Jones Industrial Average is at all-time highs. That said, let’s look at some of these names as part of our top stock trades.
Top Stock Trades for Tomorrow No. 1: Penn National Gaming (PENN)
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Penn National Gaming (NASDAQ:PENN) is getting smacked on Thursday, down more than 8% despite the company’s earnings beat.
The stock is declining right into the 200-day moving average. Interestingly, Penn is a play on both the reopening of the economy and on online sports gaming. If we weren’t seeing so much selling pressure in growth stocks, this one would likely be performing better.
Still, aggressive bulls might take a chance at this one against a key moving average and use Thursday’s low as their risk pivot.
Below Thursday’s low could put the $75 level and 50-week moving average on the table. Those playing PENN stock just need to remember to keep their risk profile in mind.
Top Stock Trades for Tomorrow No. 2: DraftKings (DKNG)
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DraftKings (NASDAQ:DKNG) is also under pressure, only it will report earnings on Friday before the open.
Shares were holding up pretty well above the $55 to $57 area, but sellers eventually cracked this one. Down into the 200-day moving average now, earnings will play a big role in how DKNG stock trades from here.
On a bearish reaction, look for a move down to the 50-week moving average. If the stock can’t find its footing, it could eventually open the door toward the $45 level.
On the upside, however, I want to see $56.75 and the 10-day moving average reclaimed. A bounce to this area is nice for traders but if those key levels aren’t reclaimed, it could leave the stock vulnerable to another test of the 200-day.
Top Stock Trades for Tomorrow No. 3: Roku (ROKU)
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It looks like Roku (NASDAQ:ROKU) is taking its earnings beating ahead of the event, with the company scheduled to release its results after the close.
Shares are breaking below the March low with Thursday’s roughly 6.6% drop. On a rebound, I want to see a move over $293, then $300. That puts the 10-day moving average in play, then the 50-day.
The real resistance barrier lately has been the 21-week moving average, but that’s well above current levels.
On the downside, though, I would love to see the 50-week moving average and that tiny gap-fill level near $265 act as support. Below, and $250 could be on the table.
Top Trades for Tomorrow No. 4: ARK Innovation ETF (ARKK)
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ARK Innovation ETF (NYSEARCA:ARKK) has not had a very good run lately. There’s clearly a bear market in growth stocks and that has resulted in poor price action for ARKK.
The stock is flirting with a major potential breakdown. ARKK is down 30% from the highs, but let’s not forget that this exchange-traded fund (ETF) rallied more than 380% from its March 2020 low to its high in February 2021.
The stock is putting in its eighth straight daily decline. Shares have already fallen below the 200-day moving average and are now teetering on the 50-week. If this $105 to $106 area doesn’t act as support, then ARKK could see sub-$100.
Below $100, and we could see a test of the 21-month moving average. Obviously a decline like that wouldn’t happen overnight, but it could eventually be in the cards if this ETF can’t find its footing.
On the upside, look for a move back over the 200-day moving average for any meaningful momentum to be found on the long side.
More immediately, I am looking for some kind of reversal, where ARKK loses a recent low and then flips around and reclaims that low.
On the date of publication, Bret Kenwell held a long position in DKNG and ROKU.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
