4 Top Stock Trades for Wednesday: UPST, BROS, SBUX, PYPL

top stock trades - 4 Top Stock Trades for Wednesday: UPST, BROS, SBUX, PYPL

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)

Daily chart of UPST stock
Click to Enlarge
Source: Chart courtesy of TrendSpider

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)

Top stock trades for BROS
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Source: Chart courtesy of TrendSpider

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)

Top stock trades for SBUX
Click to Enlarge
Source: Chart courtesy of TrendSpider

Starbucks (NASDAQ:SBUX) is an interesting stock here and reported earnings after the close.

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)

Top stock trades for PYPL
Click to Enlarge
Source: Chart courtesy of TrendSpider

Like Starbucks, PayPal (NASDAQ:PYPL) is also reported earnings after the close.

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.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.

Article printed from InvestorPlace Media, https://investorplace.com/2022/02/4-top-stock-trades-for-wednesday-upst-bros-sbux-pypl/.

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