In the first day of the third quarter, equities did what they do best: continued to rally. That said, let’s look at a few top stock trades to get us started in the second half.
Top Stock Trades for Tomorrow No. 1: Roku (ROKU)
Roku (NASDAQ:ROKU) stock was a beast on Wednesday, ending the day up more than 10%.
This one has been a troubled name. On the one hand, it’s been putting in higher lows lately as it rides uptrend support higher (blue line). On the other hand, though, shares continue to put in lower highs over the long term (purple arrows).
With Wednesday’s powerful rally, shares are reclaiming all of its major moving averages. However, the 61.8% retracement near $131 and resistance at $135 still loom large.
Over the latter, and Roku can look to rally to the 78.6% retracement near $151. A break of uptrend support, however, and its major moving averages puts $100 to $105 back in play.
Top Stock Trades for Tomorrow No. 2: Shopify (SHOP)
Before the open, I flagged the setup in Shopify (NYSE:SHOP), which continues to roar higher.
Shares have steadily bulldozed upwards, rallying from sub-$350 in April to over $1,000 to end the day on Wednesday. On a dip, I want to see uptrend support and the 20-day moving average continue to buoy this name. Below could put $700 on the table.
If Shopify stock can clear and hold $1,000, though, it could put the 261.8% extension in play — up near $1,060.
Top Stock Trades for Tomorrow No. 3: RingCentral (RNG)
RingCentral (NYSE:RNG) is another name I flagged on Wednesday morning, and man do I love this chart.
Shares continue to get bid up, riding uptrend support (blue line) and the 50-day moving average higher. So far, RingCentral has found resistance in the $290 to $292.50 area.
There now, investors are looking for a breakout. Should we get it, look for a rotation over the June high at $296.39. That could trigger a move north of $300.
On the downside, however, I am a buyer of the dip so long as RingCentral does not close below the 50-day moving average.
Top Trades for Tomorrow No. 4: Pfizer (PFE)
Pfizer (NYSE:PFE) was being bought by investors on Wednesday following positive news regarding a vaccine for the novel coronavirus.
Shares have been under strong selling pressure lately, sliding from $38.50 resistance in May down to sub-$32 in June. With Wednesday’s gap-up action, shares are reclaiming the 20-day moving average, as well as breaking out over downtrend resistance (blue line).
Now, PFE stock has a big test, at $35.60. Near this area it finds the 50-day and 200-day moving averages. Above puts the potential for a rally up to $38.50 on the table. Below the 20-day, and PFE can fill the gap back down to below $33.
Top Trades for Tomorrow No. 5: FedEx (FDX)
FedEx (NYSE:FDX) is on fire after reporting earnings, jumping nearly 12% on Wednesday.
After poking above the 200-day moving average just ahead of earnings, shares gapped above the June highs before running into resistance near $165.
On the upside, I want to see if FedEx can clear this key area. On the downside, however, look to see that FDX holds the June high near $150 as support. Below puts the 200-day moving average back in play.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret is long ROKU.