After a painful selloff on Monday, the markets put together a pretty solid rally on Tuesday. Granted, we’re not out of the woods yet, but the bulls gave a strong effort on Tuesday. So, let’s look at a few top stock trades for Wednesday.
Top Stock Trades for Tomorrow No. 1: Netflix (NFLX)
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Look at Netflix (NASDAQ:NFLX) blast off. This stock has been showing bouts of relative strength, rallying at times when the market is under pressure and holding up better than many of its FAANG peers.
That should have attracted investors’ attention (and is something I recently pointed out).
With its burst over $615, investors turned their attention to Monday’s high at $626.13. Above that, and they can now focus on the 161.8% extension near $647. Should it get there, it’s an area where bulls can trim their long trades.
On the downside, however, bulls will want to see the $615 level act as support.
Top Stock Trades for Tomorrow No. 2: Ford (F)
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Ford (NYSE:F) has given us some great price action as of late. The auto stocks were strong on Monday — which is surprising given the general weakness in the market — but Ford slipped from its recent highs.
It’s the second time the stock has pushed above $14.70 and faded hard. On the plus side, Ford continues to hold above $14, as well as the 10-day and 21-week moving averages. With these observations in play, I believe the bulls remain in control despite the two fades from $14.70-plus we’ve seen in the span of five sessions.
On the upside, clearing this week’s high (at $14.79) puts the 61.8% retracement in play, followed by $15. Over $15, and Ford stock may gain further momentum.
On the downside, though, a break of the $14 level (and thus the 10-day and 21-week moving averages), could put the 50-day in play.
Top Stock Trades for Tomorrow No. 3: Twitter (TWTR)
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Twitter (NYSE:TWTR) stock has been struggling, as have most social media stocks lately. And Facebook’s (NASDAQ:FB) action on Monday didn’t help matters.
In any regard, Twitter stock is clinging to the 50-week moving average as support. Aggressive bulls may be long against that level. However, should TWTR stock lose this week’s low at $57.64, we could be heading lower.
Some will consider a stop-loss at $57.50. Others will be a bit more dynamic — for example, a one-hour close below $57.64, etc. — but whatever way traders dice it, $57.64 is a key pivot in the short-term.
On the upside, nonetheless, there are plenty of hurdles. Back above the 200-day moving average helps alleviate some of the overhead, though.
Top Trades for Tomorrow No. 4: PepsiCo (PEP)
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Last but not least, we have PepsiCo (NASDAQ:PEP), which reported earnings before the open. And while PEP stock didn’t get a ton of love, the stock is starting to find its footing around the $150 mark.
That said, it’s struggling with the 10-day moving average and downtrend resistance (blue line).
With this week’s dip, PEP stock filled the gap from July, while it clings to uptrend support and holds up just above the prior breakout spot at $148.77. As long as PEP stock holds this area as support, I would feel comfortable in a long position.
However, bulls need to see PEP stock take out the 10-day and downtrend resistance. That could eventually put $155 in play, along with the 50-day moving average.
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.
