The S&P 500 barely tagged another all-time high on Wednesday, just like it did on Tuesday. But we continue to tiptoe around as the market searches for direction. That said, let’s look at a few top stock trades for Thursday.
Top Stock Trades for Tomorrow No. 1: Wells Fargo (WFC)
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A day after the banks kicked off earnings, Wells Fargo (NYSE:WFC) reported its quarterly results. Shares were up a solid 4% on Wednesday and traded near the session high near the close.
The stock is bursting off the 21-week moving average today and ripping over the 21-day moving average. Now it faces the 50-day moving average as its next hurdle, followed by downtrend resistance (blue line).
That’s a lot of hurdles and this is far from a runaway train on the upside. However, if the stock can clear these measures and get past the 78.6% retracement, we could see a push north of $50 and up toward $55.
Wells Fargo commands a low valuation vs. its peers, so if this group finds some momentum, perhaps WFC stock can outperform down the stretch.
On the flip side, keep an eye on the 21-week moving average. On a break of this mark, the post-earnings low is in play, followed by 61.8% retracement. A break of the June low could put $40 or lower on the table.
Top Stock Trades for Tomorrow No. 2: SmileDirectClub (SDC)
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Investors in SmileDirectClub (NASDAQ:SDC) likely aren’t flashing too wide of a grin on Wednesday, as shares get knocked to fresh lows.
The stock is breaking the key $7.20 mark and is sitting at the bottom of the $7 area, both of which are critical support areas.
A break and close below $7 could put the $5.67 gap-fill mark in play, although that’s a long way down. On the upside, let’s see if SDC stock can reclaim $7.20. If it can, perhaps $8-plus is in play, followed by the 21-day moving average.
For the record, I am not a big bull in this name. The trends are lower and support is failing. We might have the potential for a “dumpster dive” trade, but the chart flashes more warning signs than opportunity signs at this point. Just keep that in mind.
Top Stock Trades for Tomorrow No. 3: Morgan Stanley (MS)
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Morgan Stanley (NYSE:MS) has been a great investment in the financials and it will report earnings on Thursday before the open. Shares are hovering just below the highs, which has a potential breakout in the mix.
If the stock can clear $94.27, it may make a run toward $100. Statistically speaking, $100 can act like a magnet. It helps that the 161.8% extension of the current range comes into play near that mark as well.
On the downside, look for a move below Wednesday’s low. That could put the 50-day moving average in play as a possible dip-buy spot. Below the 50-day and we could see a test of the $87 to $88 zone, followed by the 21-week moving average.
Top Trades for Tomorrow No. 4: Tilray (TLRY)
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Tilray (NASDAQ:TLRY) has been trying to break out over the 21-day moving average, but hasn’t been able to close above it. Even worse, now it’s also losing the 200-day moving average as support.
This measure had been pretty solid support for Tilray throughout the last few months. If it’s reclaimed, look for a quick squeeze back up to the 21-day and 50-day moving averages.
Currently below the 200-day puts the 50-week and $13.50 level on the table. Below that, and it’s possible we see a retest of the $10 mark. Like SmileDirectClub, there is a chance this one snaps back to the upside. As it stands though, caution is warranted.
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.
