Stocks again pushed higher, led by Tesla (NASDAQ:TSLA). However, as the latter wavered, so did the former. So now, let’s look at a few top stock trades going into mid-week.
Top Stock Trades for Tomorrow No. 1: DraftKings (DKNG)
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DraftKings (NASDAQ:DKNG) popped 10% at one point on Tuesday on news that it wouldn’t pursue a deal for Entain, which would come with a price tag of more than $20 billion.
The market liked the news, as shares rallied on the announcement. However, we’ve since seen a fade from the $50 area. The silver lining is that DKNG stock is holding up over the 10-day and 21-day moving averages.
If it can continue to do so, aggressive bulls can stay long and look for a retest of $50 and this week’s high. Above $50.75 opens the door to the 50-day and 200-day moving averages up near $55.
However, a move below the short-term moving averages opens the door back down to uptrend support (blue line).
Top Stock Trades for Tomorrow No. 2: General Electric (GE)
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General Electric (NYSE:GE) delivered a somewhat mixed report this morning, but issued a better-than-expected earnings outlook and gave a boost to its free-cash flow guidance.
That had me eyeing this one for a breakout over $107.75. We got the breakout, but GE stock hasn’t been able to maintain momentum.
But you know what? That’s okay. The opportunity gave us a low-risk entry, allowed bulls to ride some of that short-term momentum and now conservative bulls can exit the trade and wait for a better setup.
Over $108 keeps the post-earnings high of around $111 in play, followed by resistance at $115.
On the downside, though, a break of the 200-day and 50-day moving averages puts the 50-week moving average in play, followed by support between $95.50 and $98.
Top Stock Trades for Tomorrow No. 3: Lockheed Martin (LMT)
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Lockheed Martin (NYSE:LMT) has an incredibly interesting chart when we overlay the weekly VWAP measure on the daily chart.
When the stock initially broke below the September low at $335.10 — a monthly-down rotation — I was looking for a reclaim of this level as a potential reversal. That would have been accompanied by some bullish divergence on the Williams %R reading at the bottom of the chart.
Rather than reverse, though, LMT stock kept on declining, which put the 2021 low on our radar just below $320.
Then we put the weekly VWAP on the chart and voila, that’s exactly where it found support in February and exactly where it’s finding support today.
Aggressive bulls will be long based on this test and look for a rebound back to (and eventually through) $335. More conservative traders will likely wait for a move back through $335 before getting long, then using today’s low as their stop-loss.
Top Trades for Tomorrow No. 4: Ocugen (OCGN)
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After so much action today, Ocugen (NASDAQ:OCGN) only added to the madness. The stock exploded higher by more than 40%. However, the stock actually finished down on the day.
Yes, you read that correctly: down during the session.
In other words, OCGN stock finished down more than 30% from Tuesday’s high and at the session low, was more than 37% below Tuesday’s high.
The stock has become a bit too volatile for many traders. On Tuesday, the stock completed one of the rotations we were previously looking for — over $11.05. A rip past $12.50 and failure to hold $11 should have been the stop-out point for most traders.
On the downside, though, this needs to hold $7.50, plain and simple. Over $9.35 opens the door to $10. Above $10 opens the door to $11.50, then today’s high at $13.23. But don’t expect it to be too easy on the upside.
On the date of publication, Bret Kenwell held a long position in DKNG. 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.
