As investors start to focus on the reopening of the country, they are turning to the beaten down stocks of 2020. We’re seeing some profit-taking in the strong sectors and stocks, and big rallies in the laggards. So for our top stock trades, let’s take a closer look at the latter.
Top Stock Trades for Tomorrow No. 1: Bank of America (BAC)
Bank stocks have really struggled over the past few months, but are rebounding on Tuesday. Bank of America (NYSE:BAC) is up more than 7% at the end of Tuesday, as investors pile into a favorite holding among traders.
So far, shares have had trouble clearing the $25 mark. This was the low in late-February, but has been resistance so far in March and April. With the stock’s series of higher lows, perhaps another retest of this area is in store.
Over $25, though, and bulls will soon face another tough task. The 200-week moving average sits at $25.86, while the declining 20-week moving average is up at $26.43. Furthermore, range support is near $25.50 to $26.
Above all of these marks, and $28-plus is possible. However, many are expecting the stock to struggle — at least initially — with this zone, provided it can clear $25.
Top Stock Trades for Tomorrow No. 2: Spirit Airlines (SAVE)
Spirit Airlines (NYSE:SAVE) is posting another big move on Tuesday, ending the day up 21%. The rally comes off the double-bottom low we saw earlier this month. It also comes after a nice sideways consolidation.
Amid the move, shares are reclaiming the 20-day and 50-day moving averages, but we may soon see it come into an interesting area.
On a continued rally, I want to see if SAVE stock can push through downtrend resistance (blue line). If it can’t, then downtrend resistance remains in play and it puts the 50-day moving average on the table.
If SAVE breaks through this mark, it puts the 23.6% retracement near $16.60 in play.
Top Stock Trades for Tomorrow No. 3: Carnival Cruise (CCL)
Carnival Cruise (NYSE:CCL) has a similar setup to SAVE — only it’s ahead of the airline.
Shares broke out over downtrend resistance on Tuesday, as the stock rallied nearly 13%. Now, we’ll have to see if shares can get through the 23.6% retracement near $18. This area has also been stiff resistance.
Back over it, though, and a rally into the low- to mid-$20s is possible. On a pullback, however, we want to see the $14 area act as support. Below could put $11 back in play.
Top Trades for Tomorrow No. 4: Macy’s (M)
Macy’s (NYSE:M) is also coming back to life, surging almost 19% on Tuesday. Shares rallied last week after an update about its business. Even though the company lost a ton of money last quarter, shares rallied on the news. That was encouraging price action.
The $4.75 area had been holding up really well as support, as shares slowly but surely put in a series of higher lows. It also had a really nice three-day low around $4.40.
Breaking out over the 20-day and 50-day moving averages on Tuesday, bulls are clearly gaining some control. It puts the $7 area in play, which has been resistance since March. Over this level and a gap-fill up toward $9 is possible, but let’s not get ahead of our skis — let’s get a close over $7 first.
We don’t want to see shares break back below $5.50 now.
Top Trades for Tomorrow No. 5: JPMorgan (JPM)
Last but not least is JPMorgan (NYSE:JPM), the so-called crown jewel of the bank stocks.
Tuesday’s rally vaulted shares over the 20-day and 50-day moving averages, with many investors looking for a squeeze up toward $100.
The $100 to $105 area has been a tough level of resistance though, as this former support zone has been attracting sellers rather than buyers. However, a move over could quickly cause a run-up in JPMorgan, potentially putting the 200-day moving average in play.
After the latest rally, we don’t want to see this one below $90.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities.