After back-to-back rallies in the stock market — and most notably in the Nasdaq — stocks took a break on Tuesday. That said, the market held up pretty well, considering the gains of the prior two days. With that in mind, let’s look at a few top stock trades as earnings season remains underway.
Top Stock Trades for Tomorrow No. 1: Upstart Holdings (UPST)
Upstart Holdings (NASDAQ:UPST) has been trading nicely lately, up more than 55% from last week’s low. Unfortunately, it’s still down nearly 70% from its fourth-quarter high.
That’s what a bear market looks and feels like — it’s brutal.
Back above the 10-day and 21-day moving averages now, let’s see if the stock can avoid making new lows, helping to reverse the trend and hopefully start to base.
On the upside, however, I want to see how it handles $128.50, which was support in December and resistance in January. Above this level could open the door to near $150.
Top Stock Trades for Tomorrow No. 2: Dutch Bros (BROS)
Dutch Bros (NYSE:BROS) is receiving a lot of attention in the FinTwit community, as shares have jumped almost 23% over the past two days. Furthermore, BROS stock has gone weekly- and monthly-up with the recent rally.
However, the stock stopped dead on the 50% retracement of the current range. If it can push through $60, it opens the door to $65, where it finds the 61.8% retracement.
On the downside, though, I want to see if last month’s high can hold as support on a dip. Otherwise, bulls may want to wait for the short-term moving averages to catch up.
Top Stock Trades for Tomorrow No. 3: Starbucks (SBUX)
Shares plunged down to channel support, bouncing just before the monthly VWAP measure. Now bouncing back up toward that notable $96 to $100 zone, the earnings reaction is going to be important.
If we get a move lower, traders must watch the monthly VWAP measure and last week’s low. Below both measures puts the $91.28 gap-fill level in play.
On a move over $100, let’s see if Starbucks can reclaim the Q4 low near $104. That’s a huge level, not just because it’s the Q4 low, but because that’s where the declining 10-week moving average comes into play, as well as where channel resistance comes into play — if it’s still relevant (channel support was).
A move over that could put around $110 in play and/or the 21-week moving average.
Top Trades for Tomorrow No. 4: PayPal (PYPL)
I happen to like PayPal on a fundamental basis and despite the broken charts, have used this opportunity to accumulate a small position in the name.
Without getting into all the analysis, let’s just say consensus estimates call for 18% to 21% annual revenue growth through 2024, while shares trade at roughly 6 times 2022 sales estimates.
As for the charts, they’re not quite so rosy, although PayPal stock did find support at the 50-month moving average.
Now rallying off the lows, the stock is approaching last month’s low and the declining 21-week moving average. If it can push through these levels, it faces more tests from the 50-week and weekly VWAP measure.
Ultimately, bulls are looking for a move back up to the $195 to $200 range.
On a bearish reaction, though, we must keep an eye on last week’s high at $165.33. Below it puts PYPL below the 10-week moving average and the monthly VWAP measure, opening it up to a retest of the low and/or the 50-month moving average.
On the date of publication, Bret Kenwell held a long position in PYPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.