The market again made a quiet push higher on Thursday, with the S&P 500 and Nasdaq hitting new all-time highs. The Dow Jones also caught a nice boost on the announcement of a new infrastructure deal. As we head into the last trading day of the week, let’s look at a few top stock trades.
Top Stock Trades for Tomorrow No. 1: Ethereum (ETH-USD)
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Well, I should have said the last trading day of the week for equity markets, as crypto markets trade 24/7. In May, Ethereum (CCC:ETH-USD) bottomed at $1,737 and snapped back up to $2,900 resistance.
However, it has continued to struggle, recently breaking below last month’s low. The dip was short-lived though, as we’ve seen a quick snap-back rally in Ethereum as it reclaimed the 200-day moving average and the key $1,975 to $2,000 area.
From here, let’s see if Ethereum can reclaim the 10-day moving average, opening the door to the 21-day and $2,500 level. Above all of that puts $2,900 and the 50-day moving average back in play.
On the downside, one more big flush lower could take out the June low. In that event, it could put the 50-week moving average and the $1,250 to $1,500 area in play. That includes a retest of the prior all-time high near $1,425. That seems like a dip to buy if we get it.
Top Stock Trades for Tomorrow No. 2: Amazon (AMZN)
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Amazon (NASDAQ:AMZN) has been trading really well, as it tries to break out of a multi-quarter consolidation.
Shares chopped around the May high over the last week, but ultimately pulled back on Thursday. The dip sent AMZN stock right to the 10-day moving average, giving attentive traders a solid dip to buy.
From here, the layout is fairly straightforward. If the 10-day moving average acts as support, look for a rebound back to the May high at $3,487. Above that puts $3,500 in play, followed by this week’s high near $3,525.
On the downside, a break of the 10-day moving average could put $3,400 and prior range support at $3,345 in play. Should Amazon decline that far, it would also put the 21-day moving average on the table.
Top Stock Trades for Tomorrow No. 3: KB Home (KBH)
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KB Home (NYSE:KBH) fell about 7% on the day and spent most of the session near its lows.
The move comes after earnings, but it might have set up investors with a great buying opportunity. Specifically, look at the “1-2-3” nature (or “A-B-C” nature) of the decline. The dip sends KB Home right to its 200-day and 50-day moving averages.
Further, if we use a downside extension measure, the 161.8% extension comes into play just below the 50-week moving average. While we didn’t quite get there on Thursday, it’s pretty close. Lastly, notice the divergence on the Williams %R measure at the bottom of the chart.
All of these combined together do not guarantee that KBH will bounce. However, we have multiple reasons for why a bounce seems probable. That’s a great way to trade.
Lastly, we know that if shares lose $40 and the 50-week moving average and can’t reclaim it, the trade is likely too early. Therefore we have a solid risk-reward setup. If the stock bounces, look for a gap-fill and a test of the 10-day moving average first. Then we can go from there.
Top Trades for Tomorrow No. 4: The Trade Desk (TTD)
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The Trade Desk (NASDAQ:TTD) has been trading really well lately, but it really exploded higher today.
After creeping through the 50-day moving average, shares rocketed through the 21-week and 200-day moving averages on Thursday. It came after some positive news related to Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG).
In any regard, TTD pushed up right to the 61.8% retracement. Yeah, and some say using technical analysis doesn’t work…
This was a great profit-taking area. Now we have to see how TTD responds. On a push up through $78, $80-plus is possible. If shares retreat, let’s see if the stock retests the 200-day moving average.
On the date of publication, Bret Kenwell held a long position in TTD. 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.
