Markets tried to make a push higher on Tuesday, but after Monday’s poor trading session the bulls had trouble gaining and maintaining momentum. With that in mind, let’s look at a few top stock trades for Wednesday, the last full trading session in the week.
Top Stock Trades for Tomorrow No. 1: Amazon (AMZN)
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Amazon (NASDAQ:AMZN) looked like it was going to rotate over the $3,750 area, triggering a major breakout that could put new highs and possibly $4,000 in play.
Instead, we got a horrible reversal that triggered excessive downside pressure. I warned investors to be careful of this, and highlighted the risk point to watch on Monday.
Now down significantly from there, there is a surprising glimmer of hope here.
The stock is finding support at prior resistance near $3,550 and the 10-day moving average. If Amazon stock can give us some sort of rotation higher — either a daily-up or an inside-and-up rotation — then this setup could still yield a return back to $3,750.
With the holidays around the corner, it’s not out of the question that Amazon can clear today’s high at $3,621.
On the downside, though, a break of today’s low could put the 21-day moving average in play.
Top Stock Trades for Tomorrow No. 2: Xpeng (XPEV)
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Xpeng (NYSE:XPEV) shares tried to breakout on Tuesday. And while it was still higher on the day, the stock is well off the highs.
If it holds above $50, it technically looks okay. However, it’s not the best look overall as it faded considerably from the $54 to $55 area, where it finds the 61.8% retracement.
On the upside, that is the next target, followed by $60-plus.
Otherwise, XPEV stock could settle back into its recent trading range. Below Tuesday’s low, as well as the 10-day and 21-day moving averages, could make Xpeng vulnerable to the $43 to $45 area and the 50-day moving average.
Top Stock Trades for Tomorrow No. 3: Starbucks (SBUX)
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It looked like Starbucks (NASDAQ:SBUX) was going to give us a weekly-up rotation on Tuesday, although there’s still time for it to do so before this week ends.
The stock has been chopping below its major moving averages for about two weeks now, but today gave bulls a nice push higher. In doing so, the stock cleared the 10-day, 21-day, 50-day and 200-day moving averages.
It also temporarily went weekly-up over $113.65. If it can do so again — and better yet, take out today’s high at $114.11 — then we may see this month’s high in play.
On the downside, however, a daily-down rotation below $111.78 puts the $109 to $110 area in play and potentially more losses as SBUX stock will be back in its downward channel.
Top Trades for Tomorrow No. 4: Dick’s Sporting Goods (DKS)
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Dick’s Sporting Goods (NYSE:DKS) was down more than 12% at one point on the day, but the stock cut those losses down to just 4%.
All this volatility comes after the company reported earnings.
Shares are now bouncing hard from a bevy of moving averages. If it can reclaim the 61.8% retracement and 10-day moving average, then the gap-fill at $137.25 is in play. Above that, and this month’s high could be on the table, followed by a push to the 2021 high at $147.39.
On the downside, however, I don’t really want to see DKS stock lose its 50-day moving average. If it does, it puts the post-earnings low and the 21-week moving average in play. The latter has been solid support this year, but if it fails, the October lows near $113 are technically in play.
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.
