The Nasdaq Composite and the S&P 500 both made new all-time highs on the day, as we continue to see rotations throughout the market amid earnings. That said, let’s look at a few top stock trades for Friday (the same day as the monthly jobs report).
Top Stock Trades for Tomorrow No. 1: DraftKings (DKNG)
DraftKings (NASDAQ:DKNG) has been struggling for direction lately, but that may change on Friday when it reports earnings. The company may really find its stride in the second half of the year, but that may not be the focus, at least tomorrow.
On the upside, $53.39 is my focus. That’s the July high. However, if DKNG stock can clear that mark, it’s more than just last month’s high. Reclaiming this mark also puts DraftKings above the 200-day, 50-week and 21-week moving averages.
Above that opens up the $56 level as a possible upside target, followed by $60-plus.
On the downside, however, I’m watching the $47 area, which has been support over the past few weeks. A break of that area could put the $42 to $43 area in play, which has been critical support so far this year.
Top Stock Trades for Tomorrow No. 2: Fastly (FSLY)
Fastly (NYSE:FSLY) was obliterated earlier in the day on what Wall Street has deemed disappointing earnings. The pain started long before Thursday though. You can see the “downshifts” on the stock chart over the last several quarters.
For instance, $62 was support, then turned to resistance last month.
FSLY stock threatened to flush below the $39.50 area earlier in the day. It even dipped below $35. But after a robust (and somewhat surprising) bounce, it’s back above $39.50. If it can finish out the week above that mark, the bulls may be okay.
That would set up the stock for a bounce to the 10-week moving average, potentially followed by the 21-week moving average.
On the downside, however, follow the levels. A close below $39.50 puts $35 back in play.
Top Stock Trades for Tomorrow No. 3: AMC Entertainment (AMC)
AMC Entertainment (NYSE:AMC) remains an “entertaining” trade, although that’s not why investors should be involved with a stock. Still, that’s the truth of the matter.
So is the fact that AMC stock remains trapped between $30 and $40, as well the 21-week moving average and the 10-week moving average.
The 21-week is support for now and the 10-week is resistance.
A break of either (along with $30 on the downside and $40 on the upside) opens up the stock to more momentum in the given direction. For instance, a close below $30 could put the $20 to $25 area in play. A close above $40 could put the 50-day moving average on the table, followed by $50.
Top Trades for Tomorrow No. 4: Moderna (MRNA)
If nothing else, learn this little cash flow reversal trade. Moderna (NASDAQ:MRNA) rallied hard into earnings as the novel coronavirus continues to persist.
Shares broke out over $350 and climbed to a high of $433 ahead of earnings. There was some divergence on the Williams%R reading (orange arrow) despite that new high.
However, the real trade was once MRNA stock traded above $433 and failed to hold it. Once back below $433, investors could short the stock with a stop at Thursday’s high and ride it down for a quick trade. That’s the case flow reversal trade I’m talking about.
From here, keep an eye on the $433 level on the upside. On the downside, though, let’s see if the 10-day moving average acts as support. Below puts the $350 breakout level back on the table.
On the date of publication, Bret Kenwell held a long position in FSLY and DKNG. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.