The markets gapped higher to start the holiday-shortened trading week, but quickly faded from its opening highs. Now, let’s look at a few top stock trades as we gear up for the rest of the week.
Top Stock Trades for Tomorrow No. 1: C3.ai (AI)
C3.ai (NYSE:AI) will report earnings later this week, but is getting the party started a little early. Shares ended the day up 16% on Tuesday.
With the move, shares ripped over the 50-day moving average and rallied right to resistance from April, which came into play near $73.75.
On a dip, I want to see the 50-day and 10-day moving averages hold as support. If C3 is able to clear $74, we could see a push in the low $80s, which was support in March. Above that, and $90 and the 21-week moving average is in play.
Top Stock Trades for Tomorrow No. 2: Nio (NIO)
Nio (NYSE:NIO) is enjoying an impressive day as well, up almost 10% on strong May delivery numbers. Like other electric vehicle (EV) and growth stocks, Nio has been under pressure over the past few months, but is finding some bullish momentum lately.
After a powerful multi-day run, Nio was stalling near the 200-day moving average. The long weekend proved to be a charge-up opportunity, allowing shares to rip through the May high of $41.45 on Tuesday.
So, what now?
I’d love to see the May high act as support. If it doesn’t though, that’s okay — it’s not the end of the world. It will however put the 200-day moving average back in play. Hopefully in this scenario, the stock finds it as support rather than fading back below it.
On the upside, keep an eye on the Q2 high of $43.22. Above it puts the 21-week moving average in play. If Nio can clear both of these measures, a test of $50 could be in play.
Top Stock Trades for Tomorrow No. 3: Farfetch (FTCH)
Farfetch (NYSE:FTCH) was holding up to the selling pressure in growth stocks for a while, but finally folded under the pressure. Shares ended up bottoming near $35 after reporting earnings.
Even though the Street sold the stock lower on what was actually a pretty good report, it didn’t take long for investors to realize the mistake. We’ve now seen a pretty powerful push over the past few days.
More specifically, Farfetch was able to push through the 200-day and the 50-day moving averages on Tuesday. If these measures turn to support, that’s very constructive price action.
Should FTCH stock lose these measures, a retest of prior channel resistance and/or the 10-day and 21-day moving averages could be in play.
If shares clear $50, let’s see if we can get a squeeze up to the 100-day moving average.
Top Trades for Tomorrow No. 4: Zoom Video (ZM)
Zoom Video (NASDAQ:ZM) is set to report earnings on Tuesday after the close. While it was a hot Covid-19 play, ZM stock has certainly lost its luster for the last few quarters.
Currently trading near $327, shares are trading up to a critical zone. This area was prior support, but then broke below this zone. It’s now currently acting as resistance. I want to see ZM stock clear this level and the 21-week moving average around $350.
If it can do that, the 200-day moving average is in play, followed by $400.
However, if the stock loses the 21-day moving average, sub-$300 could be back on the table.
On the date of publication, Bret Kenwell held a long position in FTCH. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.