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Tue, June 6 at 7:00PM ET

Thursday Predictions: 3 Hot Stocks for Tomorrow

  • The hot stocks tomorrow are key names to watch ahead of the end of Q1.
  • RH (RH): RH is first on our list hot stock for tomorrow, as the retailer gears up for earnings.
  • Apple (AAPL): With its recent breakout over the fourth-quarter high, a lot sits with Apple given its size in the market.
  • Invesco QQQ Trust Series (QQQ): Has been the best-performing index ETF this quarter.
Hot stocks for tomorrow - Thursday Predictions: 3 Hot Stocks for Tomorrow

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The stock market continues to grind in a relatively tight trading range. There have been some stocks that put together a strong rally and others that continue to chug along sideways. The stocks that are rallying are inspiring traders to look at the hot stocks for tomorrow.

Tech continues to lead the way higher for equities. Will that continue into quarter-end on Friday?

All eyes seem to be on these tech names, as they have been the indisputable first-quarter leaders for 2023. The Nasdaq is up about 12% so far this year. The next best is the S&P 500, up “just” 3.4%. The Dow Jones Industrial Average and Russell 2000 are slightly negative year to date.

Let’s look at a few of the hot stocks for tomorrow — Thursday.

Hot Stocks for Tomorrow: RH (RH)

RH is the first of our hot stocks for tomorrow.
Click to Enlarge
Source: Chart courtesy of TrendSpider

On Wednesday evening, we’ll hear from RH (NYSE:RH) and get an idea of how the higher-end consumer is doing. Are they spending? Are they pulling back? RH CEO Gary Friedman generally gives pretty good color as to what the consumer has been up to and we’ll look to get a better picture of it once RH reports.

Worth mentioning is Lululemon Athletica (NASDAQ:LULU), which opened higher by 14.6% on Wednesday and has rallied in seven straight sessions. The big upside move comes after better-than-expected earnings.

Lululemon’s earnings would suggest that consumers are still spending on premium goods and services. That should bode well for RH, even though retail as a whole has not been that impressive this quarter.

The Chart: On the upside, bulls want to see RH regain the $255 to $256 area. That would put it over last week’s high and regain prior uptrend support (blue line). Above that and $275 will be in focus, as it marks the 200-day moving average. Lastly, the $293 to $300 zone is key. That’s the 50% retracement and the 50-day moving average.

On the downside, the recent lows near $235 are key, followed by the fourth-quarter low of $227. Below the latter and the 52-week low near $210 could be vulnerable.

Hot Stocks for Tomorrow: Apple (AAPL)

Daily chart of AAPL stock
Click to Enlarge
Source: Chart courtesy of TrendSpider

Apple (NASDAQ:AAPL) stock has been trading quite well lately, as shares are up 28% so far this year. For one quarter, that’s a pretty strong return.

Apple can play a massive role in the overall direction of the stock market. With a market capitalization of more than $2.5 trillion, it’s the largest U.S. stock. Apple has a 7.1% weighting in the S&P 500, a 3.2% weighting in the Dow Jones and a 12.3% weighting in the Nasdaq 100.

The stock recently broke out over the fourth-quarter high of $157.50 and is so far holding above that mark. However, if it rotates back below this level and more weakness ensues, than the Nasdaq — the market leader so far this year — could struggle to rally.

The Chart: On Tuesday, AAPL stock pulled back but held its 10-day moving average and closed above $157.50. If it can clear the $162 area, then the 78.6% retracement is in play. Above that and $170-plus is on the table.

On the downside, bulls don’t necessarily want to see a retest of the $155 to $156 area, but if it happens, they’ll want Apple to stay above it and the 21-day moving average. Below and we could see $150 or lower.

Is Apple being marked up into quarter-end? It may be, so keep an eye on this one both Thursday and Friday, as well as into early April.

Invesco QQQ Trust Series (QQQ)

Daily and weekly chart of the QQQ ETF.
Click to Enlarge
Source: Chart courtesy of TradingView

Used by many to trade the Nasdaq, the Invesco QQQ Trust Series (NASDAQ:QQQ) is one of the top ETFs in the U.S. by trading volume. In regards to Apple, it has a 12.1% weighting in the QQQ, slightly edging out the 11.9% weighting by Microsoft (NASDAQ:MSFT).

As you can see, these two stocks make up almost 25% of the QQQ ETF. More than 50% of the ETF is weighted to its top 10 holdings, which mostly includes FAANG, Nvidia (NASDAQ:NVDA) and Tesla (NASDAQ:TSLA).

The point is, the Nasdaq — and thus the QQQ ETF — is by far the top-performing U.S. index so far this year. While it has been trading well in 2023 and is up about 10% from the mid-March low, it’s still struggling to clear a few key measures on the chart.

The Chart: The QQQ “looked above” the February high at $313.68 and quickly pulled back. While buyers continue to gobble up the dips, bulls would really like to see the QQQ clear the February high (and soon, the March high).

On the plus side, the QQQ has started making a series of higher lows, has cleared downtrend resistance (blue line on the weekly chart) and is back above all of its daily and weekly moving averages.

On the list of negatives, it’s struggling with last month’s high, as well as the VWAP measure anchored back to the all-time high. In fact, this measure has stopped each rally in its tracks. A move over this measure could open the door back to $330 or higher.

On the date of publication, Bret Kenwell held a long position in AAPL. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.

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