The S&P 500 tagged another new all-time high on Thursday as the market refuses to sink despite a few dips over the last few weeks. So as earnings wear on, let’s look at a few top stock trades.
Top Stock Trades for Tomorrow No. 1: Amazon (AMZN)
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Amazon (NASDAQ:AMZN) reported earnings after the close on Thursday. After finding a burst of momentum in the beginning of the month, the stock has been chopping around and looking for some direction.
I don’t want to overly complicate things because earnings are always a wildcard. However, we need to be aware of the possible outcomes here.
The stock’s most recent correction down to $3,500 resulted in a bounce, but also in a “lower high.” That sets up Amazon for a potential “ABC” pullback, which could land the stock down around the 50-day moving average. Below that, and the prior $3,350 breakout area is back in play.
If Amazon rallies on earnings rather than falls, look to see how it handles $3,750, which was resistance earlier in the month. A push above this measure puts the $3,950 to $4,000 area on the table.
Top Stock Trades for Tomorrow No. 2: Twilio (TWLO)
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Twilio (NYSE:TWLO) also reported earnings after the close, and you can see some hesitation on the chart. Shares continue to stall around the $400 level, but each notable dip has drawn in the buyers.
For now, the stock is holding the 10-week moving average. Look for that level to hold as support on a shallow post-earnings dip. If we get a larger dip, I’d expect the last two weeks’ worth of lows to act as support, alongside the 21-week moving average.
Below all of these measures puts the 50-week moving average on the table.
On the upside, though, we need a push above $400 and ideally above last week’s high of $412.68. Above that opens the door to the highs near $450.
Top Stock Trades for Tomorrow No. 3: PayPal (PYPL)
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It’s a mixed field out there, with PayPal (NASDAQ:PYPL) suffering a post-earnings decline on Thursday. Shares struggled with the $310 area, where it previously topped out earlier this year.
Since then, PayPal has suffered a quick decline. However, this area has me interested on the long side.
Shares are holding the 50-day moving average as support. Should we see a bit more selling, let’s see if PayPal tests (and if it holds) the breakout level near $277 and the 61.8% retracement at $276.27.
Below that could put $260 on the table.
On the upside, however, a move over Thursday’s high (at $289) could put the gap-fill in play near $297, along with the 10-day and 21-day moving averages. This is a high-quality company pulling back to key support. Let’s see if the low can hold, as aggressive buyers are likely stepping in on today’s pullback.
Top Trades for Tomorrow No. 4: Lucid Motors (LCID)
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I’ve had Lucid Motors (NASDAQ:LCID) on my list all week, but I wanted to give it a few days after its completed special purpose acquisition company (SPAC) deal to take a closer look.
This week’s rally sent shares to a high of $29.03, but it’s now seen three down days in a row. It’s not great price action, especially as Lucid breaks below a number of key moving averages.
Now it’s a “prove it” stock — it needs to prove that it’s worth owning.
If LCID stock can rebound from here and reclaim $25, and thus all of its shorter term daily moving averages, then perhaps it can make a push back toward $29. Above $30 could open the door to $35 or so.
Should the stock continue to dip, though, let’s see how the $21 area and the 200-day moving average do as support. A break below this zone could put the $17.50 area back in play.
On the date of publication, Bret Kenwell held a long position in TWLO. 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.
