It’s another brutal day for stock market bulls, as the S&P 500 and Nasdaq Composite take another dip. With that in mind, let’s look at a few top stock trades going into Friday, ahead of the long three-day weekend.
Top Stock Trades for Tomorrow No. 1: Invesco QQQ ETF (QQQ)
Each morning, I like to take a detailed look at the S&P and the Nasdaq, particularly in tough tapes like this. When the Invesco QQQ ETF (NASDAQ:QQQ) broke Wednesday’s low, it gave us a daily-down rotation that sent us through the fourth-quarter low. Thus, it also gave us a quarterly-down rotation.
As a result, that now has last week’s low in play down at $345.80. If that levels fails, then this week’s low is in play, followed by a potential flush down to $340.
On the upside, though, bulls need to reclaim the Q4 low, as well as get a couple of closes above the 21-day moving average.
Top Stock Trades for Tomorrow No. 2: Hyatt Hotels (H)
Of those showing strength, Hyatt Hotels (NYSE:H) has been on my go-to list this week. Just look at how this stock — and quite frankly, other lodging stocks — have been trading over the past few weeks.
After exploding higher the past few days, shares gapped lower, opening right near $100 and the 10-day moving average. For anyone paying attention to this stock, that was an opportunity on a silver platter.
From here, let’s see if Thursday’s low holds. If it does and Hyatt stock can take out Thursday’s high, then the 161.8% extension could be back on the table.
On the downside, however, a break of Thursday’s low could put the 21-day and daily VWAP measure in play. Given the recent strength, I’d likely try for a dip-buy in this area.
Top Stock Trades for Tomorrow No. 3: Costco Wholesale (COST)
Like Hyatt, Costco (NASDAQ:COST) is another encouraging chart. I believe Costco is riding some of the momentum we’re seeing in Walmart (NYSE:WMT) after seeing the latter report decent earnings and rallying slightly on the day.
If the market weren’t getting hammered, Walmart would likely be up more. At least, that’s what I believe.
Costco is pushing a daily-up rotation over Wednesday’s high of $514.55. It’s also clearing the 10-day, 10-week and 21-week moving averages in the process. I’m not real keen on getting long ahead of a long holiday weekend or quite frankly, even having much overnight trading exposure at this point.
However, if this one can start to lift from here, it could put $523 in play, along with the daily VWAP measure and the declining 50-day moving average. Above that opens the door up to $534.
On the downside, though, a daily-down rotation puts the 21-day in play, followed by the $502 area. Below $500, and I’m not interested in the stock on the long side.
Top Trades for Tomorrow No. 4: Palantir Technologies (PLTR)
I was never a huge Palantir (NYSE:PLTR) bull, and anyone who has read my work on the stock knows that much. Of course, that’s easy to say in hindsight, given the dismantling we’ve seen of growth stocks.
Now before you develop a bubbling disdain for me on that premise, just know that I have had to lick my own wounds as it pertains to growth stocks. My main issue with Palantir centered around its valuation and growth rate. Put simply, I didn’t find it worthy of its valuation.
But the point is moot now. Even if it was worthy of its valuation, it would be getting dumped lower anyway.
The stock had done a good job of putting in a series of higher lows lately, with resistance near $14. However, with Palantir’s gap-down today, shares are undercutting these trend lines and short-term moving averages.
Now, the $11.42 to $11.75 area becomes of interest. There we have the Day One IPO high, as well as the January low, respectively. Perhaps some kind of undercut and reversal is possible down here, but let’s not be too stubborn if it doesn’t come to fruition.
Back above Thursday’s high, and the stock will have to contend with the declining 10-day and 21-day moving averages.
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.