Following the CPI reading before the open, stocks briefly popped higher with the S&P 500 hitting new all-time highs. However, the market pulled back and settled into a quieter range for the afternoon. That said, let’s look at a few top stock trades as we go into Friday.
Top Stock Trades for Tomorrow No. 1: Chewy (CHWY)
Chewy (NYSE:CHWY) bombarded its way into February, but like growth stocks, it got caught up in a nasty selloff. Over the last few weeks though, that pressure has abated.
Shares broke out over downtrend resistance, while holding the 10-day and 21-day moving averages. The stock then reclaimed the 50-day moving average. However, it’s now struggling with the 200-day.
Additionally, the company reported earnings after the close on Thursday.
On a bullish reaction, I want to see a move over $80 and thus, the 200-day moving average. Above that opens up the underside of prior uptrend support and $88 resistance.
On a bearish reaction, however, it seems like too much to ask for Chewy to hold its 10-day and 50-day moving averages, given how close they are to the current price. Therefore, a hold of the $73 to $75 area and the 21-day moving average would leave the stock looking okay on the long side.
Below $70, and a retest of the lows are in play.
Top Stock Trades for Tomorrow No. 2: RH Inc. (RH)
RH Inc (NYSE:RH) — previously Restoration Hardware — just keeps on delivering. Shares ended Thursday up 15.7% after better-than-expected earnings.
With the move, shares gapped up over the 50-day moving average and the 61.8% retracement. Now, I’d like to see the stock hold the latter as support. Below the 61.8% retracement, and RH stock could start to fill some of that post-earnings gap.
On the upside, though, let’s see if RH stock can hold up over $700. If it can, that $733 high remains in play. Keep it simple.
Top Stock Trades for Tomorrow No. 3: Dave & Buster’s (PLAY)
What an epic rebound we’ve seen in Dave & Buster’s (NASDAQ:PLAY). It wasn’t that long ago that shares were trading below $5. Now it’s north of $40.
Earlier this week, PLAY stock launched over a number of key moving averages. Even with the recent dip, it’s holding up over these measures now (like the 10-day, 50-day and 21-week moving averages).
The rejection came from downtrend resistance (blue line) and with earnings due up after the close, the stock is at an interesting juncture.
On the downside, I want to see shares hold $40. That measure has been support over the last few months and I want to see it hold as support again if it’s tested. On the upside, let’s see if shares can take out downtrend resistance. Above puts $49 resistance in play.
Top Trades for Tomorrow No. 4: Netflix (NFLX)
Netflix (NASDAQ:NFLX) just hasn’t been able to find its groove. For about a year now, the stock has been trading in a wide range between $470 and $560.
After riding the 200-day moving average as support, Netflix broke below this level but was buoyed by uptrend support (blue line). Then that mark failed as support in May, but worse, it turned to resistance.
Now shares are below all of its short-term moving averages and is struggling to hold $482 support.
If it holds, look for a rebound back to the 21-day moving average. Above it puts $500 in play, followed by prior uptrend support.
A break of $482 puts last month’s low in play near $478.50. Below that and we may need a flush down to the $460 to $470 area.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. 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.