After a violent, record-setting bounce on Monday afternoon, stocks gapped lower on Tuesday but are attempting to find their footing. With all of that in mind, let’s look at a few top stock trades as we approach mid-week and the Fed announcement tomorrow afternoon.
Top Stock Trades for Tomorrow No. 1: S&P 500 (SPY)
While we’re at it, let’s start with the SPDR S&P 500 ETF (NYSEARCA:SPY). Here is a daily chart, with a few weekly measures overlaid. Specifically, the 50-week and weekly VWAP measures are in focus.
The SPY is working on reclaiming these marks now. If it can continue higher, let’s see how it handles last week’s low near $438. Above that opens the door to $450.
On Tuesday morning, I outlined how the SPY could move up to $450, although at the time I acknowledged it would be difficult.
If the 50-week and weekly VWAP measures reject the SPY, we must keep an eye on the fourth-quarter low down at $426.36. Below that puts this week’s low back in play, as well as a quarterly-down rotation.
That’s the roadmap to use going forward for the next couple days and potentially the rest of this week.
Top Stock Trades for Tomorrow No. 2: Exxon Mobil (XOM)
Given its relative strength in Tuesday’s premarket session, that remained the case this morning too and I’m glad we have been sticking with the winners — these are known as relative strength stocks.
This has been an exceptionally difficult tape to find one’s footing in and losses can snowball in a hurry. Sticking with the winners can help quiet some of that noise.
Exxon Mobil was able to reverse off its early lows this morning, hold the 10-day moving average and go daily-up over $73.08. Now trying for weekly up, keep looking for this group to attract buyers, especially if oil prices continue higher.
You don’t have to buy, hold and hope, but you can use this group as a go-to for the time being. Furthermore, use Tuesday’s action as an example on navigating during a tough tape.
Top Stock Trades for Tomorrow No. 3: Dogecoin (DOGE-USD)
This weekend, DOGE found support on the rising 21-month moving average but isn’t rallying the way bulls were hoping.
So far, the 10-day is acting as resistance. If it pushes through, Dogecoin faces resistance from the 21-day and 50-day, as well as from the 15 to 16 cents zone.
Above all of those levels though could put 20 cents and the December high in play.
On the downside, though, a break and close below the recent low puts 10 cents on the table, along with the 8.8 cent level.
Top Trades for Tomorrow No. 4: Johnson & Johnson (JNJ)
Johnson & Johnson (NYSE:JNJ) is a tough one here. The stock opened slightly lower on earnings but is bursting to the upside. Overall, shares ended the day up nearly 3%.
However, JNJ stock is running into a tough area of potential resistance. While pushing through the 50-day and 50% retracement of the current range, it’s now running into the 200-day and 61.8% retracement.
Additionally, this $168 area has been consistent resistance since last week. If JNJ stock can clear last week’s high at $168.72, then it can potentially put $170-plus back on the table.
If it’s resistance, however, see if the stock can hold the 50-day. Back below, and the low-$160s is a real possibility.
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.