Another solid pop in the stock market has the Dow Jones Industrial Average 25% off its highs and up 18% from its lows. Something’s got to give. That said, let’s look at a few top stock trades for Friday.
Top Stock Trades for Tomorrow No. 1: Broadcom (AVGO)
We’ve seen a huge rebound in the market over the past few days and that goes for Broadcom (NASDAQ:AVGO) stock as well. Shares fell more than 50% from $320 in mid-February to sub-$160 in March.
However, after rebounding $80 per share to $240, the stock is starting to look a bit tired. $240 appears notable on the chart here, while downtrend resistance (blue line) could be playing a role as well.
From here, let’s see if AVGO can hurdle and close above $240. Above it puts $260, then $275 on the table. If it can’t clear $240, though, then the $200 to $210 area is on the table, and potentially lower.
Top Stock Trades for Tomorrow No. 2: Livongo Health (LVGO)
Livongo Health (NASDAQ:LVGO) stock has actually traded pretty well despite the surging in volatility. Now, the current setup is looking rather bullish.
This setup is — thankfully — very simple. Rising uptrend support (blue line) is squeezing LVGO stock up into static resistance at $24. This is known as an ascending triangle, a bullish technical signal with traders looking for an upside breakout over resistance.
The setup fails should uptrend support give way. Above $24, and $26 is possible.
Top Stock Trades for Tomorrow No. 3: Tesla (TSLA)
The volatility has been running rampant in Tesla (NASDAQ:TSLA) stock, not that that’s surprising to most investors. Shares are running into downtrend resistance (blue line), while trying to hold above the 100-day moving average.
There are cleaner setups than TSLA out there at the moment. However, right in the middle of the range, investors will have their eye on this one. If it loses the 100-day moving average, a move back down to $450 is possible. Below that, and the 200-day moving average is in play.
Above $550 (downtrend resistance), however, and $600 is possible. This level has been notable amid the selloff. Over it puts the 50-day moving average in play near $650.
Top Stock Trades for Tomorrow No. 4: Micron (MU)
Micron (NASDAQ:MU) was in focus on Thursday after the company reported earnings. The stock is running right into the 50-week and 100-week moving averages, as well as the 2019 breakout level.
I need to see MU reclaim and hold $46, putting $50 on the table. Below the $46 mark and a retest of the 200-day moving average is possible. Below that and long-term range support near $32.50 is possible.
Top Stock Trades for Tomorrow No. 5: Short S&P 500 ETF (SPXU)
After a strong rally in the S&P 500, some investors may be getting nervous about a potential pullback. One way to short or hedge a portfolio is via small sizes in inverted ETFs.
I should note that the ProShares Ultra Short S&P 500 (NYSEARCA:SPXU) is not for everyone. It’s a levered inverse ETF, and is risky business. However, after falling from $44 to $25 in just a few days — highlighting the possible risk here — this ETF is hitting the 200-day moving average and short-term uptrend support (blue line).
If markets start to rollover or if we get a sell-the-news reaction to the stimulus bill, the SPXU might be good for a move north of $30. I can’t stress enough the volatility with these types of ETFs. You’ve been warned.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long AVGO.