Man, what a sucker punch the bulls absorbed today. After a 90% upside day on Friday and an 84% upside day on Tuesday, bulls looked like they were in control for the short term. Now, bears have harnessed control, exemplifying their own 90%-plus downside day. With all of that in mind, let’s look at a few top stock trades, as everything — especially the retail sector — falls lower.
Top Stock Trades for Tomorrow No. 1: Invesco QQQ ETF (QQQ)
Look at the way the Invesco QQQ ETF (NASDAQ:QQQ) closed on Thursday. It finished above last week’s high, that stubborn $305 level and the 10-day moving average.
That was huge! But sadly, none of it matters now.
The 2022 low is now on vulnerable at $284.94. If the QQQ can hold this level, it’s possible we see another bounce. However, there’s no other way to say it other than Wednesday’s price action is very discouraging.
A full-on break of $285 and failure to recover this level could ultimately open the door down to $260, where we find the rising 200-month moving average.
Above this week’s high and bulls can make more progress on the upside.
Top Stock Trades for Tomorrow No. 2: Lowe’s (LOW)
Lowe’s (NYSE:LOW) is part of the retail cohort that moved lower on Wednesday, with these names being crushed.
The stock is dipping through the 38.2% retracement and testing down into the breakout zone near $180. On a slightly deeper decline, the monthly VWAP measure is there, but personally, I’d rather wait for a juicier risk/reward.
To me, that comes at $150, which was clear support for the stock in 2020 and 2021, as well as where we find the rising 200-week moving average.
On the upside, though, watch $200 and the 10-week moving average, the latter of which has been active resistance.
Top Stock Trades for Tomorrow No. 3: Costco Wholesale (COST)
Costco Wholesale (NASDAQ:COST) is “guilty by association” in this tape, as retail earnings are coming in far worse than expected. That’s even though the company doesn’t report until next week.
Looking at the chart now, the stock is cutting through the fourth-quarter low and the 21-month moving average. If we can reclaim this level near $436, we could see a potential reversal trade on the long side.
On the downside, however, a break of the 61.8% retracement could open the door down to the $390 to $400 area. If that doesn’t work, the 200-week moving average could be in play.
Top Trades for Tomorrow No. 4: Cisco Systems (CSCO)
Cisco Systems (NASDAQ:CSCO) went weekly-up at one point this week and even pushed above the key $50 level. It’s now being rejected by these levels, though.
It’s now struggling to hold a few key areas, as well as the 200-week moving average and the monthly VWAP measure.
If the stock loses last week’s low near $47.50, then the 61.8% retracement could be on the table. On the upside, Cisco really needs to clear $51.50 to have a more sustainable rally.
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.