After a tough couple of days in the market, the bulls came back with some fight on Tuesday. Each major index gained more than 1.5%, while the Russell 2000 jumped more than 3% on the day. That said, let’s look at a few top stock trades.
Top Stock Trades for Tomorrow No. 1: Ethereum (ETH-USD)
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Crypto continues to struggle to find upside momentum. On Monday I looked at Bitcoin (CCC:BTC-USD). So now, I’ll look at Ethereum (CCC:ETH-USD).
Ethereum remains below all of its major moving averages — save for the 50-week moving average. That’s down near $1,400.
For now, the crypto continues to find buyers in the $1,700 to $1,750 area. But the way it continues to squeeze lower does not seem to bode well for longs. If Ethereum loses $1,700 and can’t reclaim it, it could put the $1,400 area and the 50-week moving average in play.
On the upside, it’s simple. Ethereum needs to reclaim the 10-day moving average, which has been resistance for weeks. Above that puts $2,000 and the 200-day moving average on the table.
Top Stock Trades for Tomorrow No. 2: Netflix (NFLX)
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Netflix (NASDAQ:NFLX) reported earnings after the close, and this one has been a bit of a mixed bag. While the rest of FAANG has seemingly found its footing, Netflix continues to stumble a bit.
Shares continue to hold the $525 level after filling last month’s gap today. That’s a good sign as the stock reversed higher. However, it’s struggling with the June high.
On a bullish post-earnings rally, I want to see Netflix take out the recent high near $557.50, putting the Q2 high in play near $563.50. Above that and $575-plus is in play.
On a bearish post-earnings reaction, however, I would love to see the 200-day, 50-week and 50-day moving averages hold as support. That’s a powerful trifecta that sits roughly 4% to 5% below current levels.
A break of that zone could put uptrend support in play (blue line).
Top Stock Trades for Tomorrow No. 3: Philip Morris (PM)
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Speaking of earnings, Philip Morris (NYSE:PM) reported before the open. And the stock dropped as a result of the report.
I zoomed in a bit on this one, using a four-hour chart. Notice how the stock is finding its footing at the 200-unit moving average and near the 21-week moving average. This is the first time this area has been tested since January, where it also acted as support.
Granted, that was also at much lower prices though.
If support fails from here, we may be looking at a dip down toward $90 and the weekly VWAP measure. If support does hold though, perhaps we can get a rebound back toward that $97.50 area.
Top Trades for Tomorrow No. 4: AMC Entertainment (AMC)
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The meme trade remains alive and well, even as AMC Entertainment (NYSE:AMC) and others have been awfully volatile. Shares came in hard last week and filled the gap near $33.50.
While the stock broke last week’s lows on Monday, AMC was able to reverse higher and get back above $33.50. Notice how the stock continues to close above this mark, even on sessions where it breaks below it.
With today’s rebound, shares are back into the 50-day and 10-week moving averages. That does have me a bit skeptical. If we can close above $40 and these measures, perhaps a squeeze up toward the 21-day moving average is in play.
If the current area acts as resistance, keep an eye on $33.50 again, as well as this week’s low at $31.15.
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.
