Stocks remain trapped in heavy volatility, and the next few days won’t get much easier short of some peace talks in Eastern Europe. Tomorrow, Federal Reserve chairman Jerome Powell continues his testimony, and on Friday we get the monthly labor report. Until then, though, let’s look at a few top stock trades for Thursday.
Top Stock Trades for Tomorrow No. 1: S&P 500 (SPY)
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Using the SPDR S&P 500 ETF (NYSEARCA:SPY), we can generate a pretty solid roadmap for the index. I want you to really look at this chart. While there’s no such thing as guarantees in trading, notice how it’s trading vs. the prior range.
Currently in an “ABC” correction, the worry right now is that this turns into an “ABCDE” correction. Essentially, a three-wave pullback vs. a five-wave pullback.
When the SPY bottomed and rallied on Jan. 24, it rallied to the 61.8% retracement near $458 and failed. In fact, it rallied to this level twice before failing. Now rallying off the Feb. 24 low — interesting date — we are coming into the 61.8% retracement of the current range again.
Only this time, there’s also the VWAP measure from Jan. 24, the 50-week moving average and the 21-day moving average.
That’s not to sound overwhelming, but rather to highlight how many significant measures are between $438.50 and $441.50.
If the SPY can clear all of these levels, the 200-day is next, followed by $450. Depending on what they’re trading or how long they plan to hold, bulls may want to consider trimming and raising their stop-losses and/or hedging.
Top Stock Trades for Tomorrow No. 2: Salesforce (CRM)
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Salesforce (NYSE:CRM) is trying to rally on earnings, but the move has been meager at best. Shares are 32% below the all-time high, but it’s struggling with channel resistance.
On the plus side, the stock is clearing the 10-day and 21-day moving averages, but it’s still in a precarious area — particularly with its lack of upside “oomph” on earnings.
However, the levels are pretty clear. Above Wednesday’s high opens the door to the declining 50-day moving average. Thus far, the declining 50-day has been a selling opportunity for most growth stocks.
If CRM stock can clear the 50-day, keep an eye on the February high at around $234.50, then the $243.30 gap-fill level.
On the downside, however, the $200 area is critical. A break below it puts the $185 low back in play.
Top Stock Trades for Tomorrow No. 3: Rivian (RIVN)
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Rivian (NASDAQ:RIVN) shares bounced in late January with the rest of the market, but $68 resistance held the stock in check.
Now rolling back over, the stock faces a potential monthly-down rotation below $53.50. A break of this level opens Rivian stock back up to a test of the 2021 low at $50.
On the upside, though, shares need to reclaim the 10-day and 21-day moving averages, then $68. However, I’m not sold on Rivian, mainly due to its valuation.
Top Trades for Tomorrow No. 4: Snowflake (SNOW)
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We’ll get earnings from Snowflake (NYSE:SNOW) today after the close, and this high-flying stock has been under watch by many growth investors.
The stock is one of the few technology names that didn’t break to new lows on Feb. 24. Instead, it bottomed near $240 and bounced. However, shares have not been able to reclaim the 10-day moving average.
From here, though, the roadmap is pretty clear.
On a bearish reaction, the stock needs to hold the $232 to $240 area. A break below it could eventually put $185 in play.
On the upside, however, Snowflake needs to clear the 10-day and 21-day moving averages. If it can, the $295 area is in focus. There it finds the 61.8% retracement of the current range, as well as the 50-day and 200-day moving averages.
Above that, and longer-term bulls can shoot for $330 to $340, but it’s unlikely to get there in a straight line — especially in this environment. I’m just laying it out should we not revisit this one for a while.
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.
