Bulls were tired on Monday, and they looked tired again on Tuesday. Stocks slipped lower on the day as growth stocks continue to try and find their footing. With that in mind, let’s look at a few top stock trades for Wednesday.
Top Stock Trades for Tomorrow No. 1: Shopify (SHOP)
Shopify (NYSE:SHOP) enjoyed a nice rally on the day, but the chart really lacks clarity at this point. Every major dip is bought, preventing a big breakdown, while every rally is sold and preventing a big breakout.
That said, it’s had one heck of a run over the last year, even though it’s been consolidating for months now.
Shares continue to hold up over $1,050 on a weekly basis, even if Shopify “wicks” below this measure on occasion. Furthermore, it continues to hold the backside of prior downtrend resistance (blue line).
On the upside, we need to see this name clear its 10-week and 21-week moving averages. Above them opens the door to the $1,225 to $1,275 zone, which has been resistance since December.
However, on a break below $1,000 (and the March low at $1,005), we could see a larger decline down toward $885. Near $900, and the stock would be down about 40% from the highs.
Top Stock Trades for Tomorrow No. 2: Walmart (WMT)
Walmart (NYSE:WMT) popped higher on earnings, but it’s not running away on a robust rally. Still, it opened above the $142 resistance level, then held this area as support.
It’s still early in terms of post-earnings price action, but this is a good start even if the gains are relatively small.
Now let’s see if the stock can fully fill that February gap up at $144.83. Above could open the door to the 2021 high near $150.
If Walmart stock closes below $142 and losses the 200-day moving average, see if the 50-day moving average acts as support. If it doesn’t, the May low may be back in play near $136.
Top Stock Trades for Tomorrow No. 3: Baidu (BIDU)
Baidu (NASDAQ:BIDU) has been a pretty wild holding over the last six months. Shares essentially doubled in just a few months, then were cut in half again. It didn’t help that some big players were being liquidated in this name, which is mostly attributed to Archegos Capital’s forced liquidation.
Either way, the price action has been interesting. The initial decline sent BIDU stock down to the 50-month and 200-week moving averages. However, shares couldn’t reclaim the 21-week moving average or the $225 area. Both measures acted as resistance.
On the most recent dip, the 50-month and 200-week moving averages again acted as support. Will they again?
If we see Baidu lose $174, the stock could see a test of the $145 to $150 area. Particularly if tech stocks see more selling pressure.
On the upside, let’s see if we can get a daily close over the 10-month moving average. That puts the post-earnings high in play, followed by $200, then the 10-week moving average.
Remember, we don’t have to trade every stock, but looking at levels like this may help some traders when they examine other stocks or assets.
Top Trades for Tomorrow No. 4: Social Capital (IPOE)
Social Capital (NYSE:IPOE), which will likely become SOFI stock in the future, is trying to rally.
The stock continues to bounce off the $14.75 to $15 area, but it continues to struggle with downtrend resistance and the 50-day moving average.
Above $17.50, and I’ll have my eyes focused on the April high, up at $18.64. Above that, and perhaps $20 is possible.
If resistance holds, look to see if the 10-day and 21-day moving averages act as support. If they don’t, $15 could be back on the table. Below the May low, and perhaps we see the low-$13s probed.
On the date of publication, Bret Kenwell held a long position in SHOP. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.