After several consecutive down days, the bulls came to play on Wednesday with stocks enjoying a solid rally. With that in mind, let’s look at a few top stock trades for Thursday — the last trading day of this holiday-shortened trading week. It’s also the monthly options expiration, for what it’s worth.
Top Stock Trades for Tomorrow No. 1: JPMorgan (JPM)
Click to Enlarge
JPMorgan (NYSE:JPM) kicked off bank earnings on Wednesday, reporting a bottom-line miss. In turn, JPM stock fell 3.2% on the results.
In my pre-earnings assessment, the $125 to $128 area was notable. That’s where prior support came into play, along with the 50% retracement of the post-Covid rally and the 200-week moving average.
In other words, this area is significant.
The stock also has some bullish divergence on the RSI measure (blue arrow), while trading 26% below its all-time high. If it finds support, look for a potential gap-fill up to $130.70. Above that puts its shorter term moving averages in play.
On the downside, though, a break of $124.50 could open the door down to the $113 to $115 area, where JPMorgan stock finds the 61.8% retracement.
Top Stock Trades for Tomorrow No. 2: Airbnb (ABNB)
Click to Enlarge
Airbnb (NASDAQ:ABNB) came to life on Wednesday, popping 7.3% on the day. It’s rocketing off the weekly VWAP measure and the 200-day, clearing its short-term moving averages in the process.
On the upside, let’s see if ABNB stock can push higher, with airline and travel stocks. If it can continue high, the $178 to $180 zone is in play, which is last month’s high and downtrend resistance (blue line).
Above that opens the door to the $187 area.
On the downside, however, $157.50 is the line in the sand. If Airbnb loses that level, $151.50 or lower is in play.
Top Stock Trades for Tomorrow No. 3: American Airlines (AAL)
Click to Enlarge
Speaking of airline stocks, American Airlines (NASDAQ:AAL) is powering higher as Delta Air Lines (NYSE:DAL) rallied on earnings.
The move is not only putting AAL stock in a monthly-up rotation over the March highs, but it’s also breaking it out of channel resistance. Unfortunately, the charts are still a bit messy as it contends with the 200-day.
If American Air stock can clear the 50% retracement and the weekly VWAP measure, $20.75 to $21 could be in play next — which is the 61.8% retracement.
That said, those who are bearish on the airlines could consider selling into this rally given the number of overhead hurdles. I’m not one of them, though.
Top Trades for Tomorrow No. 4: UnitedHealth Group (UNH)
Click to Enlarge
UnitedHealth Group (NYSE:UNH) is up more than 17% off the February low and has been powering higher, up in five of the past seven weeks. One of those “down” weeks was a loss of just 0.09% too — so let’s call it flat.
With Wednesday’s action, the stock is pulling back into the 10-day moving average and bouncing. The kicker? UNH stock will report earnings before the open on Thursday.
If it rallies on earnings, look for $548 to $550 on the upside. That’s followed by a possible move to $560 to $562, where it finds the 161.8% extension.
On the downside, though, I want to see if UnitedHealth can find its footing near $520 and the 21-day moving average. Below that will put the 10-week moving average in play.
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.
