We saw another massive rally in the stock market, as investors continue to digest earnings. With that in mind, here’s a look at a few top stock trades from the day.
Top Stock Trades for Tomorrow No. 1: Facebook (FB)
While it’s nice to see mega-cap tech and social media rally, it’s concerning to see Facebook (NASDAQ:FB) stock up 6% before reporting earnings.
See those two down days where FB stock was failing at the 200-day moving average and the 61.8% retracement? I would have liked one more flat to down day ahead of the report.
Now coming into it up 6% worsens the risk/reward for longs. It can still go up, but likely by a smaller amount and it will be harder to rally as expectations rise.
From here, look to see if Facebook can keep climbing to the 78.6% retracement. If it can, that allows it to start filling into the gap, which was created in February. To fill it completely, FB will need to rally up to $210.
On the downside, tough, I’d love to see a pullback down to the 200-day moving average and 61.8% retracement. A dip to this level that holds as support converts a notable resistance level into support. Below puts the 50-day and 20-day moving averages in play near $176.
Top Stock Trades for Tomorrow No. 2: Advanced Micro Devices (AMD)
Advanced Micro Devices (NASDAQ:AMD) came into earnings with a very bullish looking chart. In fact, if it weren’t for a pending binary event (earnings), this would have been a slam dunk setup for longs.
The reaction to earnings was bearish, with AMD pulling back by several percent. However, the world will not end over this slight dip. Shares still have support near $52, as well as the 20-day moving average near this mark.
That’s not to say that a bounce is guaranteed for Advanced Micro Devices, just that it would be healthy to see this level hold. Below puts the 50-day moving average and $50 in play.
On a rally, however, let’s see if AMD stock can reclaim $56. Above $56 puts $58 resistance in play, followed by the 2020 highs near $60.
Top Stock Trades for Tomorrow No. 3: Boeing (BA)
Boeing (NYSE:BA) reporting disappointing earnings, but that’s not stopping the stock from rallying about 6% on the day. When a stock rallies on bad news, it should catch investors’ attention.
The stock was able to resist a breakdown below support on Monday. With Wednesday’s rally, BA shares are reclaiming the 20-day moving average and downtrend resistance (blue line). A move over $150 puts Boeing north of the 23.6% retracement.
If it can achieve that, it puts the 38.2% retracement and declining 50-day moving average on the table. Stay on your toes, though. A move back below the 20-day keeps support near $122 in play. Below opens the stock up to a move down to the $105 level.
Top Stock Trades for Tomorrow No. 4: Blue Apron (APRN)
Yikes, Blue Apron (NYSE:APRN). Shares are down more than 25% after disappointing earnings. There’s not much to say about this one. APRN has been a loser since it went public, resorting to a reverse split to boost its stock about two years into its public trading life.
Shares rocketed higher in March on the thesis that meal kits and delivery plays set up well for the novel coronavirus situation.
Not a bad theory and shares traded in a tight range near $12 as a result. But now that range is broken and Blue Apron stock cannot be trusted. While the 50-day moving average is holding as support, there is simply too much risk on the chart. Big air pockets in the form of gaps loom like magnets should shares start to sell off.
To get interested on the long side, I’d need to see Blue Apron clear $12, then the April high near $15. Short of that, there are much better long candidates out there.