The markets almost retested the February low, but buyers stepped up in the afternoon. With that in mind, let’s look at a few top stock trades before we continue to push forward.
Top Stock Trades for Tomorrow No. 1: Ark Innovation Fund
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The Ark Innovation Fund (NYSEARCA:ARKK) ripped hard for three-straight sessions but was rejected by the declining 21-day moving average and the 50-week moving average.
After five straight daily declines, we were working on a sixth daily decline before Tuesday’s bounce. ARKK undercut the February low of $57.50 and gave bulls a great bullish reversal.
That said, ARKK still needs to get back up through the 10-day and 21-day moving averages. If it can do that, the 50-week is back on the table.
On the downside, though, $57.50 is the level to watch. A break of that mark puts this week’s low in play at $56.22.
Top Stock Trades for Tomorrow No. 2: Oil
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Oil prices have taken center stage on Wall Street, with investors closely watching the explosive price action. The United States Oil Fund (NYSEARCA:USO) follows the movement of oil, but not exactly.
As you’ve seen in crude oil, USO’s action has been explosive too.
This week’s move exploded USO up over the 61.8% retracement when mapped back to the 2020 range. If it can continue higher, $100 will be on investors’ radar, with $106.50 in play above that.
However, if we see a pullback here in the short term, the $70 area is pretty critical. That’s where the February high comes into play, along with the 200-week, 10-week and 50-month moving averages.
Top Stock Trades for Tomorrow No. 3: Exxon Mobil
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Exxon Mobil (NYSE:XOM) has been a rewarding holding for bulls. In February, we were buyers on the dip and that has worked out very well for those who read this column.
Shares have exploded off the 10-week moving average and eclipsed $90 before fading in today’s session. If Exxon stock can get above and stay above Tuesday’s high, we could be looking at a push up to the $96 to $97 area.
Above that and $100 will be in the discussion.
On the downside, though, keep an eye on the $82.50 area. That level comes into play near the 10-day moving average. Below that and investors’ attention should shift to the 10-week moving average.
Top Trades for Tomorrow No. 4: McDonald’s
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McDonald’s (NYSE:MCD) has been in a brutal downtrend. Shares have declined in 14 of the last 18 sessions and tried hard to rally on Tuesday. The stock undercut Monday’s low and bounced, but is now being rejected by the 21-month moving average.
It’s a very troublesome and sloppy chart. If McDonald’s bounces and reclaim $230, let’s see if it can climb back to the 10-day moving average.
Should the trend remain lower, it’s possible that McDonald’s declines to the 261.8% downside extension and the monthly VWAP measure. Currently, we’re in an “ABC” correction, but keep in mind this could turn into a five-wave decline — and “ABCDE” correction — and we must consider the market’s overall trend while trading individual stocks like McDonald’s.
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.
