The markets put together a nice rally on Tuesday, following Monday’s disappointing attempt. With that in mind, let’s look at a few top stock trades for Wednesday as earnings season really gets underway.
Top Stock Trades for Tomorrow No. 1: Netflix (NFLX)
Speaking from the stock’s perspective, it’s hard to imagine sentiment being worse in Netflix (NASDAQ:NFLX) ahead of earnings. The stock is dragging along one-year lows, down about 50% from the highs.
Seriously, sentiment is horrible here. On a pop, bulls need to see if Netflix can reclaim the 10-week moving average, which was resistance last month. Above that could open the door to the $385 to $400 range.
If shares clear that, the 200-week moving average is in play.
On the downside, though, keep a close eye on the $330 area. A break and close of this mark could put the Covid-19 lows back in play at $290.
Top Stock Trades for Tomorrow No. 2: Roku (ROKU)
As an investor in growth stocks, I do believe there is long-term value in Roku (NASDAQ:ROKU) after the haircut it has taken. That doesn’t mean the low is in and it does not mean the charts look good. In fact, as a trader, this chart looks downright horrible.
Based on Netflix’s reaction to earnings, Roku will likely be an after-hours mover too. If it rallies, I would have an eye on the declining 10-week and 50-day moving averages.
This was stout resistance a few weeks ago and may be so again. Above that, keep an eye on the $139 to $143 area. This $4 range was prior support that turned to resistance.
On the downside, though, the $100-ish area has been support. See that that remains the case should shares decline.
Top Stock Trades for Tomorrow No. 3: Halliburton
Halliburton (NYSE:HAL) tried to rally on earnings but just couldn’t maintain momentum with oil down more than 5% on the day.
Looking at the chart though, this name looks incredibly healthy still. On a dip, let’s see if the 10-day acts as support. If not, the $39 breakout area and the 21-day moving average may be on tap.
Like other stocks in the space, I want to be a dip buyer with these names. If the first dip fails, I will turn my attention to the next area until the market says it’s time to move on from energy.
On the upside, however, a close above $43 could eventually open the door to the $48 to $50 area.
Top Trades for Tomorrow No. 4: S&P 500 (SPY)
I wanted to look at the S&P 500 ETF (NYSEARCA:SPY), as it tries to find its footing near current levels. Tuesday’s daily-up rotation has really paid off. Now the question is whether it can maintain momentum.
The SPY ETF has been chopping between $438 and $444 for the last week or so. The 10-day has been active resistance, so if the SPY can clear this hurdle, it opens the door up to the 200-day and 21-day moving averages near $448.50. Not to mention, this would be the 50% retracement of the current range.
Even though a rally of that magnitude may prove to be a selling opportunity, it’s one that investors should still respect.
Below $443 keeps the SPY below active resistance and thus, technically keeps $438 on the table. Below that level puts this week’s current low of $435.61 in play, followed by $433.50.
On the date of publication, Bret Kenwell held a long position in ROKU. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.