Most indices closed lower on the day, while the Nasdaq Composite held up surprisingly well. As earnings wear on, let’s look at a handful of companies that have reported (or are reporting) for our top stock trades.
Top Stock Trades for Tomorrow No. 1: General Motors (GM)
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General Motors (NYSE:GM) got smacked after reporting earnings, down almost 9% on the day.
The move sent the stock below the July low. In fact, GM stock is hitting its lowest level since March. However, the decline is sending the stock right down to the 200-day moving average. Not to mention, there seems to be some interest in the $53 area as it pertains to support.
If GM stock can bounce from the 200-day moving average and reclaim this area, it could put the 10-day and 21-day moving averages back in play, as well as the gap-fill level and prior uptrend support.
A break below the 200-day moving average puts $50 and the 50-week moving average in play. In that scenario, it could give bulls a nice “ABC” correction to a key area, but let’s first watch how it does near this moving average.
Top Stock Trades for Tomorrow No. 2: SoFi Technology (SOFI)
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I recently had a piece published on SoFi Technology (NASDAQ:SOFI) titled, “After Its Retreat, SoFi Stock Poses Little Risk to Buyers.” That was as the stock was approaching a low-risk buy zone, where support was something we could look for near current levels.
Even if you throw out the bull case for SoFi’s fundamentals, the technicals were attractive enough to draw in some buyers.
That’s as the $15 level was in play and was a known support zone. Bouncing now, the stock is reclaiming the 10-day and 21-day moving averages, while the former is trying to cross up through the latter, indicating further bullish momentum.
Those long from the $15 area may consider a break-even stop. That’s because, preferably, this name won’t drop below the two key moving averages outlined above.
On the upside, I’d love to see SoFi clear $17.50 and retest the 50-day moving average. Above that puts $20 on the table.
Top Stock Trades for Tomorrow No. 3: Uber (UBER)
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Uber (NYSE:UBER) reported earnings after the close, but the stock has not been trading well as the novel coronavirus has become a tough one to battle. That’s a threat to the travel industry, as you can see in Uber’s recent price action.
The $51 to $52 area was once support, but over the last few months, this area has become resistance. Now, Uber has faded below all of its major moving averages and it’s breaking the May low as we speak.
Ironically, it may be a good thing to see the stock come in so much ahead of earnings. If that’s the case, I want to see a rebound back over the $45 breakdown level and back above the 10-day moving average. If possible, back above the 61.8% retracement and the 21-day moving average is even better.
However, should Uber stock continue lower, bulls need to know where the risk is. It may take more than a day, but it could ultimately put the $36 to $37.50 area in play.
Top Trades for Tomorrow No. 4: Skillz (SKLZ)
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Skillz (NYSE:SKLZ) isn’t being spared on Wednesday, down nearly 11% and hitting multi-month lows after disappointing earnings.
The setup is pretty simple to me: SKLZ stock needs to reclaim $12.85-ish.
Currently, it’s trapped in a painful downtrend and is below all of its major moving averages. I don’t like buying stocks in a downtrend. Back above the $13 level and $15-plus is possible provided Skillz can reclaim some of the short-term moving averages.
On the downside, though, $10 or lower could be in play if it can’t get back above $12.85.
On the date of publication, Bret Kenwell held a long position in SOFI. 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.
