More complaints are rolling in about the choppy trading action, but hey, what can you expect? Summer is here and the public has been cooped up for the better part of a year, while the Fed’s on tap for Wednesday and it’s a quadruple expiration day on Friday. With all of that in mind, let’s look at some top stock trades as we wade through the mess.
Top Stock Trades for Tomorrow No. 1: Apple (AAPL)
Click to Enlarge
Is Apple (NASDAQ:AAPL) a sleeping giant? The tech titan with a market capitalization north of $2 trillion has gone nowhere for almost a year now, consolidating its massive post-coronavirus gains.
The stock turned some heads on Monday as shares ripped through the 50-day moving average. Holding above that level on Tuesday, the stock’s humble consolidation could pave the way for more gains.
Of course, the Fed and expiration day could ruffle a few feathers for a highly liquid name like Apple. But if it doesn’t, this one could be on its way to $138.
On a close back below the 50-day, we have to keep the 200-day moving average and uptrend support in mind.
Top Stock Trades for Tomorrow No. 2: Target (TGT)
Click to Enlarge
Target (NYSE:TGT) is a name I’ve kept my eye on for a while, waiting for shares to cool off.
The stock ignited higher last month, ripping through the 161.8% extension and hitting new all-time highs. Since then, it’s been a slow rise higher.
Now dipping to the 10-day moving average, bulls have an attractive long setup. With a low-risk level to watch on the downside, we have the potential for a four-times daily-up rotation (rotating over the last four days worth of highs) above $233.70.
On the downside, a close below $230.75 is a warning that perhaps the dip-buyers aren’t as strong as we hoped, and that a potential test with the 21-day moving average may be in the cards.
Top Stock Trades for Tomorrow No. 3: Lordstown Motors (RIDE)
Click to Enlarge
I’m going to throw it out there right now: Lordstown Motors (NASDAQ:RIDE) is not a stock I like to trade. It’s way too volatile, and the moves are just too intense. And while some traders undoubtedly love that, I don’t.
I can’t sleep at night with a wild gapper flying all over the place, wondering what it will do the next day or if it will have a CEO.
On Monday, shares dropped almost 20% on news its CEO and CFO will step down. The next day, it snapped higher. While RIDE stock reclaimed uptrend support, its key moving averages are working against it.
If it can reclaim these measures, then $12.50 could be in the cards. If it can’t, this week’s low remains in play and $8.88 remains vulnerable. I don’t expect there to be a ton of upside, at least until the company figures out its C-suite issues.
Top Trades for Tomorrow No. 4: iShares Nasdaq Biotechnology ETF (IBB)
Click to Enlarge
I’m saving the best for last and that’s the iShares Nasdaq Biotechnology ETF (NASDAQ:IBB).
This setup is as simple as it comes. Shares have been on a tear and are now resetting after a powerful move. That comes as it tests down into the 8-day and 10-day moving averages.
A slightly lower open on Wednesday would do the trick to give us a full test of the 10-day.
In any regard, the dip also comes into a prior resistance zone near $159. I want to see this area act as support, helping to put the recent high near $165 back in play.
If IBB stock breaks below all of these marks, we have a failed dip-buy and that’s okay. We simply move on from it. But the setup is there for a decent risk/reward.
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.
