The market had a strong finish on Tuesday and roared higher on Wednesday. With Thursday’s pre-market inflation report sure to dominate the headlines, the market is at an important juncture. With that in mind, let’s look at a few top stock trades.
Top Stock Trades for Tomorrow No. 1: S&P 500 ETF (SPY)
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Specifically, I find the S&P 500 at a pretty interesting juncture right now. At one point, we didn’t know how the charts would resolve: Either down from a bear pennant or higher after a quick consolidation.
For now, it’s the latter.
The S&P is running right into the level I was watching this morning. In the case of the SPDR S&P 500 ETF (NYSEARCA:SPY), that comes from a combination of the 61.8% retracement, declining VWAP measure and last week’s high.
Should it push through this area, the 50-day moving average near $460 is the next level to watch.
On the downside, however, keep an eye on today’s low. Below that could push it down into the gap, putting the $452s on the table. We have some strong, positive volume breadth today. Now let’s see if the CPI report can create more relief than panic.
Top Stock Trades for Tomorrow No. 2: Nvidia (NVDA)
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Nvidia (NASDAQ:NVDA) slipped yesterday after news that it would abandon its deal for Arm. I personally think it was a good move after Nvidia’s stock price soared and made the cash-and-stock offer incredibly expensive.
With the stock rallying, it seems investors feel similarly. Shares are going weekly-up with Wednesday’s rally over $258.17, and now investors are gunning for the $270s.
Conservative bulls will look to trim right in the $270 to $271 zone. Aggressive longs will look to squeeze out a run to the 50-day moving average and 50% retracement. Above that puts the daily VWAP in play.
On the downside, though, a move back below last week’s high puts $250 back in play, along with the 10-day and 21-day moving averages. Don’t let a good winner turn into a loser for you.
Top Stock Trades for Tomorrow No. 3: Disney (DIS)
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Disney (NYSE:DIS) came oh-so-close to filling that gap down at $128.04 when it bottomed at $129.26 late last month.
Moving higher now, we’ll see how the stock holds up after the company reports earnings. On the upside, keep an eye on the $150 level, where the 50-day and daily VWAP measures come into play.
Above that could open the door to the $158 to $160 area, where Disney stock finds its January high.
On the downside, however, keep an eye on the 200-week moving average. That’s followed by a support zone near $132, then last month’s low near $129.25.
Top Trades for Tomorrow No. 4: Twilio (TWLO)
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Like Disney, Twilio (NYSE:TWLO) reported earnings tonight. I really like this name. It’s a great business with solid growth and at some point, this decline represents value, in my opinion.
Stabilizing near current levels, I would really like to see Twilio hold last month’s low in the low-$170s.
If it can stay above the 200-week and 50-month moving averages, that will be a big win for bulls.
On the upside, a move above the 10-week could put the $$235 to 240 area back in play. This was prior support turned resistance. Above $250 could open the door to the $270 to $275 area. Above the latter is a plethora of key measures.
On the downside, though, a break of $172 and close below this mark is a bad look.
On the date of publication, Bret Kenwell held a long position in Nvidia and Twilio. 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.
