The market continues to grind at all-time highs as earnings trickle in and ahead of the Federal Reserve’s Jackson Hole meeting. With this in mind, let’s look at a few top stock trades as we approach midweek.
Top Stock Trades for Tomorrow No. 1: Amazon (AMZN)
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I know I have talked about Amazon (NASDAQ:AMZN) a few times recently in this column. However, most recently I said Amazon needed to test down to its 50-week moving average, which is exactly what it did last week.
It closed below that measure, but quickly reclaimed it this week. Now powering higher, Amazon is actually giving us a weekly-up rotation by clearing last week’s high at $3,300.
From here, let’s see if shares can push back up to the 10-week and 21-week moving averages. If it can power through, perhaps a larger rally up toward $3,500 can occur.
On the downside, though, keep an eye on the 50-week moving average. Below this measure, and this week’s low is on the table. Below that, and many short-term bulls will likely stop-out of the trade, as it leaves the stock vulnerable to a test of this month’s low — followed by $3,000.
Top Stock Trades for Tomorrow No. 2: Best Buy (BBY)
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Best Buy (NYSE:BBY) popped higher on earnings, but it’s not out of the woods quite yet.
Shares are rallying right into resistance near $123. And so far, this zone is rejecting BBY stock. We’ll need to see if it can push through this mark or not. If it can, the $128.50 high is in play. Above that, and the 161.8% extension near $142 could be on the table.
However, if Best Buy can’t push through $123, let’s see where support comes into play. The longer it holds up over $120, the better. But if it loses this mark, a retest of its short-term moving averages may be in play.
Top Stock Trades for Tomorrow No. 3: Salesforce (CRM)
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Salesforce (NYSE:CRM) has been consolidating for quite some, as it has yet to take out its late-summer 2020 highs. The stock was exploding higher at the time, then failed to regain momentum after the tech-stock pullback in September 2020 and its acquisition of Slack.
Now rallying into earnings, bulls are in a tough spot. CRM stock is hitting 2021 highs coming into the print, which for me, I don’t like those types of pre-event rallies. It makes a post-event rally harder to achieve.
I’d keep an eye out for a pop up to the $270 area that results in a fade. In other words, be leery of the stock giving up its gains on a positive reaction and failing at resistance.
In any regard, watch that resistance zone near $270. Above that technically opens the door to the all-time high at $284.50, then $300 above that.
On the downside, though, see which — if any — moving average steps in as support. Below the 50-day moving average puts $240 in play, followed by the 200-day moving average.
Top Trades for Tomorrow No. 4: GameStop (GME)
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Is the meme trade back on with GameStop (NYSE:GME) now? It feels that way with the stock’s huge pop.
I had previously drawn in the $212 level, so I left it on there to see if GME stock could clear this mark. So far the answer is “yes,” as the stock is enjoyed a robust rally on the day, up almost 28%.
Over $197, and GME stock is giving us a monthly-up rotation over the July high. However, it really just needs to holds up over $185. That keeps it above the 50-day and 10-week moving averages, as well as the weekly VWAP measure. Above those marks, and bulls can stay in control.
Over $212 and Tuesday’s high, and who knows where GME stock could go — but it could fly if another squeeze gets underway.
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.
