After gapping lower on Dec. 20, the stock market has exploded higher. Even after last week’s strength, the markets continued to power higher on low volume on Monday, Dec. 27. Let’s look at a few top stock trades now.
Top Stock Trades for Tomorrow No. 1: S&P 500 ETF
I don’t normally lead off with the SPDR S&P 500 ETF (NYSEARCA:SPY), but with the S&P 500 finally hitting new all-time highs, I figured it would be fitting.
Before the open, I highlighted the weekly chart which shows just how darn tight the SPY chart has been getting. Oftentimes these weekly charts help keep the bigger picture in mind.
As you can see on the chart above, the SPY continues to hold the 21-week moving average and the $450 to $453 area. Now pushing up through $470, shares are hitting new all-time highs.
So what now? I would love to see the SPY hold the 10-day moving average as support, as well as stay above the $470 level. The latter has been stiff resistance for about two months.
If it can stay above the prior high at $473.54, then we can keep the 161.8% extension in mind up near $488. However, we will need some healthy pauses along the way.
Top Stock Trades for Tomorrow No. 2: Invesco QQQ ETF
The Invesco QQQ ETF (NASDAQ:QQQ) also looks much better, but it’s not quite running wild like the SPY. That’s likely as growth stocks remain a huge overhang for the ETF and tech stocks in general.
For now, the stock is clearing that difficult $400 to $401 resistance area. Like the SPY, this resistance level has been in play for about two months now, while the 21-week moving average continued to act as support.
In both cases – for the QQQ and the SPY – their prior breakout levels also acted as a rough area of support.
Up next? The $408 to $409 level, which is where prior all-time high comes into play. It’s also where the November high sits, so if we can get a strong enough push, it puts a monthly-up rotation in play over $408.71.
In that case, the 161.8% extension could again be an intermediate term target for bulls.
Top Stock Trades for Tomorrow No. 3: Micron
“On the upside, however, I want to see Micron power through the November high at $87.71. That would give bulls a monthly-up rotation. Above $89.05 [this month’s high] and we can start talking about $95 again, then, of course, the obvious $100 level.
On the daily chart above, you can see how Micron stock opened above the November high and held that level on the pullback. The stock then pushed above this month’s high at $89.05 and held that mark as support too.
Now well into the $90s and $95 is the next obvious test. This level has been resistance over several months and quarters earlier this year. Above $95 puts the all-time high in play at $97.50 – which is from the year 2000!
Above the high and $100-plus is in play.
On the downside, I would love to see Micron stock hold the $87 to $89 area as support, along with the 10-day moving average.
Top Trades for Tomorrow No. 4: Roku
I will keep Roku (NASDAQ:ROKU) short and sweet. Last week, the stock put in a rather tight trading range between $222 and $239.
Well, tight for this stock anyway.
Back above its 10-day and 21-day moving average now, bulls are looking for more relief. If the stock can clear $238.75, we have a weekly-up rotation in play. That puts the 10-week moving average in play, followed by the $260 to $265 zone and the 50-day moving average.
On the downside, a break of $222 gives us a weekly-down rotation and could put $200 back in play if the dip is not quickly bought.
On the date of publication, Bret Kenwell held a long position in ROKU. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.