A day after the Federal Reserve announcement and the market still hasn’t sorted out which direction to go. This morning’s gap-up was sold into — I hate gap-ups during a downtrend — and now we’re back to square one. Let’s look at a few top stock trades going into Friday’s expiration.
Note: $100 may be in play now for Advanced Micro Devices (NASDAQ:AMD).
Top Stock Trades for Tomorrow No. 1: Apple (AAPL)
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Apple (NASDAQ:AAPL) went into its post-market earnings after enduring its eighth straight daily loss on Thursday.
On the plus side, shares are holding the ~$157 high from the third quarter, as well as the 21-week moving average. Obviously earnings will likely have an impact on it though.
If Apple stock has a bearish post-earnings reaction and breaks below this week’s low, it could put the $150 level and the 200-day moving average in play. Slightly below that puts the $145 high from January 2021 in play, along with the 50-week moving average.
On the upside, a rally could put the $168 to $170 zone in play, with the 21-day and 50-day moving averages coming into play near the latter part of that zone.
If we gap up, see if the stock can hold its gains or if it fades lower. With its $2.6 trillion market capitalization, Apple will have some weight to throw around the indices tomorrow.
Top Stock Trades for Tomorrow No. 2: McDonald’s (MCD)
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McDonald’s (NYSE:MCD) is putting in its fourth straight daily decline and 12th loss in the last 14 sessions.
Why did I highlight this one? Well, it’s not a great trade setup currently. However, there is a setup I want to point out.
This is one of the few stocks I was watching before the open, as shares were gapping down. But it wasn’t the gap-down that had me interested; it was where the stock was gapping down to.
Had shares gapped down to or traded under the December low near $244, it had the 200-day moving average just below. A tag of the 200-day and a reclaim of last month’s low — two notable levels — would be an attractive entry.
Known as a reversal, this could have given bulls an attractive risk/reward setup. It’s something I want to point out to other traders, as it’s oftentimes missed amid the chaos of the trading day.
Top Stock Trades for Tomorrow No. 3: ServiceNow (NOW)
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ServiceNow (NYSE:NOW) opened higher by more than 14% and rallied about 15% at highs, but is now up about 9% on the day. To be honest, that’s pretty good in this environment even though the chart looks uninspiring.
From here, see that the stock holds the 10-day moving average. Below it puts last week’s low in play near $507. If that level fails, then $485 is on the table, a level that has been support over the past three days.
On the upside, see if NOW stock can push through today’s high and the declining 21-day moving average. If it can, the weekly VWAP measure and 50-week moving average is in play.
That’s followed by the 200-day moving average and the pivotal $290 area.
Top Trades for Tomorrow No. 4: Lucid Motors (LCID)
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Lucid Motors (NASDAQ:LCID) has been hammered lately, falling 34% over the last six sessions and roughly 14% today.
Now that the $35 area has failed as support, shares are plunging. However, Lucid stock is trading right into the prior breakout area between $27.50 and $30, as well as the 50-week and 200-day moving averages.
I’m not a big fan of Lucid Motors when the technicals break down, but if bulls are interested in this name, it may be an area to pay attention. If it fails, that’s one thing, but if we get a bounce in this one, I wouldn’t be surprised if it came from this zone.
More conservative traders will wait for it to reclaim $30 and I can’t blame those who do.
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.
