The stock market had a very good day on Wednesday, generating 80% upside breadth on the New York Stock Exchange. However, it’s struggling to find its groove on Thursday, with major U.S indices lower on the day. With that in mind, let’s look at a few top stock trades for Friday, when we’ll also get the jobs report.
Top Stock Trades for Tomorrow No. 1: Costco (COST)
Like other retailers, shares of Costco Wholesale (NASDAQ:COST) have actually been trading pretty well. However, has the recent momentum sapped some of the stock’s post-earnings potential?
Costco stock rallied for the sixth-straight session and has climbed almost 8% in that span. However, it’s struggling with last month’s high at $534, which is also the gap-fill level from January.
If that’s the extent of the move and we see a dip from here, I would love to see the $520 to $525 area buoy the stock. Not only was that recent resistance turned support, but it’s where Costco stock finds its 10-day, 21-day, 50-day and 10-week moving averages, as well as the daily VWAP measure (which is anchored to its prior earnings report in November).
To lose all of these level is what I call “deliberate price action” and opens the stock up to more downside. Specifically, it could put $500 back in play, followed by uptrend support (blue line). Below that, and the January low puts the 200-day moving average in play.
On the upside, however, $550 is a level of interest, followed by $565 to $570.
Top Stock Trades for Tomorrow No. 2: Boeing (BA)
Each rally in Boeing (NYSE:BA) is being sold. Bulls want to bet on a return to normal, but it’s tough under the current circumstances, even as travel stocks have traded better.
Rolling over on Thursday, let’s see if the $185 to $190 area can act as support. This is a key area and has been for months.
If it breaks, that could open the door to a larger correction. If that’s the case and shares start to break down, it would have me eventually looking at the $158.50 area.
On the upside, though, Boeing needs to reclaim $200, then $208. Above the latter puts Boeing above all sorts of moving averages and VWAP measures, opening the door to the $215 to $220 zone.
Top Stock Trades for Tomorrow No. 3: Peabody Energy (BTU)
Energy stocks have seen serious momentum lately and that’s the case with Peabody Energy (NYSE:BTU) as well. Last week, it rallied to resistance near $20, then faded hard back into the $14 to $15 area.
$14.35 ended up holding as support, along with the 21-week moving average. The stock has exploded since.
Traders who are long may consider booking some profit with the 161.8% extension of the smaller range (red Fibonacci lines), which comes into play at $22.85. Above that opens the door up to the larger range extension near $26.75, then $28.
There is some bearish divergence on the chart, so bulls have to be careful — particularly if oil and energy lose their bid. On a correction, bulls want to see $20 act as support.
Top Trades for Tomorrow No. 4: Snowflake (SNOW)
I know we previewed Snowflake (NYSE:SNOW) yesterday, but Thursday’s action has me wanting to take another look.
Here’s another example of “deliberate price action.” Snowflake gapped below the 2021 low of $232.83, rallied up to that level and was then rejected. Now below both the January low and the higher low made in February, bulls must be careful.
Unless these levels are reclaimed — near $233 and near $240, respectively — then Snowflake stock is vulnerable to more downside. Specifically, I’m looking at $200 on the downside, then the $185 area.
On the upside, however, a move over $240 gets us to the gap-fill near $250.
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.