After a lower open, the markets found a way to rally for most of the day on Tuesday. With that in mind, let’s look at a few top stock trades going into Wednesday, as market participants gear up for the CPI report on Thursday.
Top Stock Trades for Tomorrow No. 1: Peloton (PTON)
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Peloton (NASDAQ:PTON) stock exploded higher on Monday following a rumor on Friday evening that it could be bought out. Shares gained 21% on the day but tacked on another 25% today after the company ousted its CEO — perhaps lending some credibility to the company’s desire to be acquired.
However, the stock is running into the 50-day and daily VWAP measure here, causing some bulls to take profits.
If we can push above Tuesday’s high, it opens the door to the 50% retracement up near $42.25. Above that, and we could get to the 61.8% retracement of this current gap-down range, followed by $50.
Below the 50-day, however, and we may see a revisit of $30. Expect wild moves here and plenty of headline-driven volatility. If that’s not your thing (it’s not mine), feel free to pass.
Top Stock Trades for Tomorrow No. 2: Pfizer (PFE)
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Pfizer (NYSE:PFE) has good and bad observations here, as shares fell about 3% following earnings.
The stock undercut the January low of $49.81, but not by much. From there, it gave us a bullish reversal with a great risk/reward. On the flip side, PFE stock hasn’t been able to get back up through $51.86.
If it can do that, it has quite a few obstacles on the upside in the form of its short-term moving averages.
On the downside, though, a break of the post-earnings low could eventually put a test of the 200-day moving average in play.
Top Stock Trades for Tomorrow No. 3: Teladoc Health (TDOC)
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The chart for Teladoc (NYSE:TDOC) is not healthy at all. This stock has been trapped firmly in a painful downtrend, as sellers continue to lean into this name. Can you be surprised, though?
Notice how TDOC stock had a strong three-day rip, climbing more than 20% in that span. That’s classic bear-market action.
However, shares couldn’t get back through the declining 10-day and 21-day moving averages.
Now, it will try to avoid breaking below $67 support. If it does, it could open the door down to the all-time low near $55. On the upside, taking out this week’s high at $78 could open the door to this month’s current high just shy of $81.
Above that and the declining 50-day moving average is in play.
Top Trades for Tomorrow No. 4: Meta (FB)
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How much is enough when it comes to selling Meta (NASDAQ:FB)? The stock has been absolutely buried, falling more than 31% in just four days. From the highs, shares are down about 42%.
Earnings are the culprit for the recent spill, but keep in mind that the stock is now lower for the fourth-straight week. So it’s not as if this was a healthy chart before the print.
It’s knifing through the 200-week and 50-month moving averages, the monthly VWAP measure and the 261.8% downside extension from the most recent range.
That’s tough.
If we can regain $220, then $225 to $226 may be next. Above the 200-week moving average, and we could possibly see $240.
However, if shares remain locked in a downtrend, see how it reacts to the above support levels that should have buoyed the share price. On the downside, there is a gap-fill at $197.50 or so should Meta stock continue lower.
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.
