Stocks were mixed on Wednesday, as bulls cautiously bid stocks higher for a while, but struggled to hold those gains through to the close. With that in mind, let’s look at a few top stock trades from a relatively quiet trading session.
Top Stock Trades for Tomorrow No. 1: Amazon (AMZN)
Amazon (NASDAQ:AMZN) continues to trade well. Earlier this month, shares breached $2,700 and ran to new all-time highs.
That pop could not be sustained, though. However, when shares pulled back, they found support at the 20-day moving average and right at the prior breakout spot. And when resistance turns into support, it’s a bullish development to take note of.
Shares are now bouncing up into the $2,650 area. Ideally bulls will see a rotation higher, clearing this month’s highs at $2,722 and putting more upside in play.
Should shares fail to do that, however, keep an eye on the $2,500 level and the 20-day moving average. Below puts uptrend support and the 50-day moving average in play.
Top Stock Trades for Tomorrow No. 2: Activision Blizzard (ATVI)
Video game stocks are huge winners right now. If there’s no pandemic, secular growth continues. However, a pandemic increases gameplay and spending. So it’s a win-win for investors, and stocks like Activision Blizzard (NASDAQ:ATVI) are trading like it.
Activision stock broke out over $68 in May and twice corrected back down to this level over the next month or so. Both times, $68 acted as support — and just like with Amazon, this is a bullish development to take note of for traders.
What I want to see is ATVI stock break out over $75 now. That puts the two-times range in play at $78 and possibly a move up into the $80s.
On the downside, though, see if the 50-day moving average and uptrend support (blue line) act as support. Below puts $68 back on the table.
Top Stock Trades for Tomorrow No. 3: Fastly (FSLY)
How much praise can we heap on Fastly (NYSE:FSLY)? This stock fell into the $10 range in March, and is now knocking on the door to $60.
The move comes as shares break out over $50 on Wednesday, with the stock making a powerful statement with today’s 10% rally. I love the clean breakout this week, but do wonder about the $60 level as possible resistance.
Measuring from the March lows to the 52-week highs, the two-times range extension comes into play at $59.84. Above that, and the 261.8% extension is all the way up near $75. Bulls who have been long may consider taking some profits now and holding out for more upside in case Fastly maintains momentum.
On the downside, however, watch $50 and the 20-day moving average. Below puts the 50-day moving average in play.
Top Stock Trades for Tomorrow No. 4: Oracle (ORCL)
Oracle (NYSE:ORCL) keeps looking like it wants to break out, but man, it just can’t gain any significant traction.
Shares keep topping out at downtrend resistance (blue line). More recently, we’ve seen a few rallies up to $55, but Oracle fails when it runs into the 78.6% retracement. Now, the stock is struggling with its 20-day, 50-day and 200-day moving averages after reporting earnings.
I don’t have anything against ORCL, but it’s a dud when it comes to trading.
If shares can clear the 78.6% retracement, it puts a move into the upper-$50s in play. On a break of $51 support, though, look for a drop down to $49.50, where it finds the 50% retracement. Below that, and the 38.2% retracement is possible near $47.50.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret is long FSLY.