It was a quiet day until the Fed Minutes were released this afternoon. Even then, things didn’t get too crazy. With all of that in mind, let’s look at a few top stock trades as earnings continue to roll in during this mid-August week.
Top Stock Trades for Tomorrow No. 1: Target (TGT)
Target (NYSE:TGT) is enjoying an explosive post-earnings rally, up more than 12% on the day. Even more impressive is the rally leading up to earnings, with shares up more than 11% in the last few weeks.
However, we’re getting into a tricky area — particularly for new longs.
The stock is rather overbought in the short term, as shown via the RSI reading circled in blue. Furthermore, Target is rallying up into the 161.8% extension at $152.25.
Should Target continue higher, look for a rally up to the two-times range extension near $167. On the downside, though, look for a move back below the 161.8% extension. Below Wednesday’s low puts a gap-fill in play back toward $137, where Target will find the 123.6% extension.
Top Stock Trades for Tomorrow No. 2: Lowe’s (LOW)
Lowe’s (NYSE:LOW) is having a more muted reaction to earnings, much like we saw with Home Depot (NYSE:HD) and Walmart (NYSE:WMT).
Aggressive bulls may consider buying a dip down to the 20-day moving average and uptrend support (blue line).
However, a close below $150 lands it below the 138.2% extension and the 20-day moving average, putting the 50-day moving average in play. Below that, and shares may need some more time before setting back up as a long play.
However, over Wednesday’s high — which is a new all-time high, by the way — puts the 161.8% extension in play at $166.36.
Top Stock Trades for Tomorrow No. 3: Visa (V)
Visa (NYSE:V) has been slowly but surely recovering, consolidating in a sideways pattern for three months now.
If shares can rotate over and close above this month’s high at $202.89, it puts a possible breakout in play. If that’s the case, the gap-fill level from February near $207 is on the table — followed by the February high at $213.49.
On the downside, though, look for a dip into uptrend support (blue line) and the $187 area. Near the latter, bulls will find the 200-day moving average. That could be a low-risk buying opportunity, should the breakout fail to materialize.
Top Trades for Tomorrow No. 4: BioMarin (BMRN)
It’s a tough session for BioMarin (NASDAQ:BMRN), as shares tumbled more than 35% on the day. However, the setup allows for three types of plays for dip buyers.
First, there’s uptrend support (blue line) near $73. With today’s big drop, the selloff could become exhausted near this area. This would be a setup for aggressive buyers.
Second, there’s the March lows in play near $70. This gives investors time for the stock to have a larger washout — perhaps over the span of multiple days — which can really wear out the sellers.
Finally, there’s the $63 level, for more conservative bulls. This has been tested just twice in five years — in 2016 and 2019 — but both times it has marked a sharp rebound. More aggressive buyers may consider buying at $65 or $66 rather than $63, in an effort to not miss the dip should BMRN fall this far in the first place.
For BioMarin buyers, there’s a little bit for everyone. Personally, I like options No. 2 and No. 3 the most.
Top Trades for Tomorrow No. 5: Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) is set to report earnings after the close, and it will be a closely followed report.
After pushing to $500, the stock has had a lot of momentum leading to the report. Then again, so did Advanced Micro Devices (NASDAQ:AMD) and it was still able to race higher on the print.
Should buyers lift Nvidia stock again, I am looking for a run to $535 — the 261.8% extension. On a drop, however, look for a decline to the $410 to $450 area. That is a broad range, but it’s where NVDA finds the 20-day and 50-day moving averages, uptrend support and the two-times range extension.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret is long NVDA.