All it took was a Fed day to spice things up and get the market moving on Wednesday. With the markets whipping around a bit — failing to breakout or breakdown as of now — let’s take a look at a few top stock trades.
Top Stock Trades for Tomorrow No. 1: Oracle (ORCL)
Oracle (NYSE:ORCL) was in focus before the Fed news as the company reported earnings. Shares made what I call a “deliberate” breakdown. What I mean by that is, the stock opened just below the 50-day and 10-week moving averages and instead of reclaiming these key measures, the stock sold off from those measures.
If investors really wanted to save Oracle stock, they would have bought the stock at this area, not sold it.
Now that becomes a key area to recover. If Oracle can reclaim these key moving averages, then the 21-day moving average is in play, as is the gap-fill up toward $81.
On the downside, shares are actually bouncing nicely from Wednesday’s low. However, if Oracle can’t reclaim the 50-day and 10-week moving averages, then Wednesday’s low remains vulnerable.
In that case, the $73 to $74 area remains in play, as well as the 21-week moving average.
Top Stock Trades for Tomorrow No. 2: The QQQ ETF (QQQ)
Earlier this week, the Invesco QQQ ETF (NASDAQ:QQQ) poked its head up over the $342 level, but then backed off that mark over the last few days.
The markets moved lower on the initial reaction to the Fed news, but the QQQ found its footing on the 10-day moving average. After trading a handful of days above this measure, a retracement to it isn’t all that surprising.
Bouncing hard now, we have the stock right back into last month’s resistance level. Should the QQQ break the 10-day moving average and Wednesday’s low, the 21-day and 50-day moving averages could be in play.
On the upside, a breakout over the current all-time high could put the 261.8% extension in play up near $355.
Top Stock Trades for Tomorrow No. 3: Coca-Cola (KO)
Coca-Cola (NYSE:KO) is finding itself at the front of the conversation after Cristiano Ronaldo removed two Coke bottles from his press area and said to drink water instead. It seems like a pretty silly thing to make a fuss over, but I guess the media needed something until we got the Fed.
We don’t talk about Coca-Cola all that often, but remember, this is the stock that has been stuck between its 78.6% and 50% retracements.
The stock is giving us a nice dip to the 10-week moving average and is now back below the 78.6% retracement. From here, I want to see a rebound back over the 78.6% retracement, giving bulls a clean bounce off the 10-month.
Back over the 10-day and 21-day moving averages could put a test of the 52-week high in play.
Top Trades for Tomorrow No. 4: Lennar (LEN)
Lennar (NYSE:LEN) will report earnings after the close. Shares have been consolidating in this sort of falling wedge, bull pennant formation.
The stock has enjoyed a strong run off the lows, so this type of pullback isn’t all that surprising. To be honest, as much as the longs don’t want any more pain, a gap-down open near the 200-day moving average may be the most attractive setup here.
It would be the first test of this measure in more than a year and likely give the stock a nice bounce.
Investors need to watch out for an early rally or a gap-up to the $95 to $96.50 area. There Lennar finds a cluster of key daily and weekly moving averages and would be a prime “sell the news” spot if it can’t gap over this area or break through it.
Above $97, and the $100 level is in play, along with the 50-day moving average.
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.