Two weeks ago, the bears were raving about how the equity market “bubble” was about to burst. Well that argument has gotten suddenly quiet as the S&P 500 works on its seventh straight daily gain and approaches new highs. Let’s look at some top stock trades, starting with a few big ones.
Top Stock Trades for Tomorrow No. 1: Tesla
Man, how rewarding has this stock been? Tesla (NASDAQ:TSLA) has been an absolute beast, now up in nine straight weeks. The stock topped out at $900 on Thursday, 40 cents short of the all-time high.
We have been bullish on this name for a while now, but recently called for the stock to hit $1,000 a share and a market capitalization of $1 trillion.
The first step in that process will be making new all-time highs. On the downside, I want to see the stock’s short-term moving averages like the 10-day and 21-day continue to hold as support.
The more time Tesla can spend over the $880 to $900 area, the better the odds become that the stock will be able to climb to $1,000.
Should a larger dip come along, let’s see how the $780 to $800 area holds as support.
Top Stock Trades for Tomorrow No. 2: Nvidia
Now sustaining over $220, Nvidia bulls are looking for a push over resistance and the all-time high near $230. If it can break out over this level, it could set the stage for a run up toward $250 and the 161.8% extension near $252.
On the downside, watch for a break below $220. That could open the door to the 50-day moving average.
Top Stock Trades for Tomorrow No. 3: PayPal
Investors really are not liking the news about PayPal (NASDAQ:PYPL) exploring a purchase of Pinterest (NYSE:PINS). The reports must be legitimate — PayPal wouldn’t allow its stock to fall more than 10% in two days on a rumor if it had no merit. Management would simply say it’s untrue.
That doesn’t mean the deal will happen, but it must be a real discussion that’s taking place.
Originally we had an “ABC” correction down to the 10-month moving average and a nice rotation higher. However, that turned into a five-wave “ABCDE” correction when the stock broke down from the 50-day moving average on Wednesday on the Pinterest news.
Now bulls are trying to figure out where support will come into play. I am looking for some type of reversal in the stock, like a gap-down open and a reclaim of the prior day’s low.
In this case, let’s see if the $240 to $241 area acts as support. That’s the 161.8% downside extension of the current “C-D” leg. On the upside, PYPL stock needs to reclaim the 10-month moving average. If it’s resistance, bulls could struggle in the intermediate term.
Top Trades for Tomorrow No. 4: Square
While PayPal struggles, Square (NYSE:SQ) seems to be doing just fine. The stock is working on its eighth straight daily gain and is making multi-week highs.
The stock is also clearing the 50-day moving average and downtrend resistance (represented by the diagonal blue line).
From here, let’s see if Square stock can climb to the $275 resistance area. A push through this zone opens the door to the $283 to $285 resistance level. Above that and we can turn our focus to $300-plus.
On the downside, I’d love to see the 10-day and 50-day moving averages act as support, but I mostly want to see Square hold up above prior downtrend resistance. That will keep buyers in control in the short term.
On the date of publication, Bret Kenwell held a long position in NVDA and PINS. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.