On the first day of trading in the fourth quarter, the stock market got off to a strong start. More stimulus news drove some late day volatility, but it was a solid start to the quarter. With all of that in mind, let’s look at a few top stock trades ahead of the jobs report on Friday.
Top Stock Trades for Tomorrow No. 1: Pinterest (PINS)
Pinterest (NYSE:PINS) stock broke out to new highs on Thursday, as the stock was finally able to push through $42.50.
The stock had been flirting with a move to new highs for a while now, as bulls are being rewarded for their patience. Thankfully, the setup from here is fairly straightforward.
On the downside, bulls need to see $38 to $40 hold as support. If it does, it keeps the recent breakout intact and keeps the risk tilted toward the upside.
On the upside, however, see if shares can push through the two-times range extension at $44.40. Above puts $50 in play, followed by the 261.8% extension up at $55.
Top Stock Trades for Tomorrow No. 2: Crocs (CROX)
Crocs (NASDAQ:CROX) jumped more than 12.5% at one point on Thursday on news that Justin Bieber would be working with the firm.
Perhaps the Biebs is a technical analyst in his spare time, as the move was enough to send Crocs to new 52-week highs. It’s a level that Crocs has been struggling with for weeks.
Now, we need to see shares close above $45. If it does, it keeps the breakout play intact, with short-term bulls likely targeting the $50 mark. Above $50 puts the 123.6% on deck at $52.15.
If shares close below $45, though, see if Crocs finds support at the 20-day and/or 50-day moving averages. Below puts $37.50 in play, which is roughly the September low.
Top Stock Trades for Tomorrow No. 3: Constellation Brands (STZ)
Constellation Brands (NYSE:STZ) is mixed after earnings, falling about 2.6% on the day after initially opening higher.
The reaction is disappointing, but perhaps not surprising. Now we need to see if shares can hold up around the $180 to $185 area. There STZ finds the 78.6% retracement, 50-day moving average and the double-bottom low from September.
Below will put the 200-day moving average in play and potentially the August low at $169.31.
On the upside, however, look for a rotation back above this week’s high at $191. That’s also the post-earnings high, as it’s from Thursday. Above puts the September high in play at $197.97, followed by the pre-coronavirus highs at $206.68.
Top Trades for Tomorrow No. 4: ConAgra Brands
ConAgra Brands (NYSE:CAG) is roughly flat on the day and like STZ, it too reported earnings.
The $35 mark has proven key in the past year. It marked the high in December and was resistance in April and June. CAG stock eventually broke out over this level in July but failed to hold it later this summer.
In any regard, below $35 puts the 200-day moving average on the table, while above $35 keeps bulls in the driver’s seat. However, investors don’t really have momentum on their side until CAG can reclaim the 50-day moving average.
Above that puts $39 in play, the high from August.
Top Trades for Tomorrow No. 5: Gilead Sciences (GILD)
Gilead Sciences (NASDAQ:GILD) caught a boost on Thursday on positive talk about the company’s coronavirus drug, remdesivir.
For now, the stock is holding right where it needs too, near long-term uptrend support on the weekly chart (blue line).
We now have a two-week low to measure against on the downside, at $61.65. If that breaks and the stock can’t reclaim it, $58 to $60 could be on tap.
On the upside, bulls need to see Gilead reclaim the $65 to $66 area. Not only has this mark been significant over the past 20 months, but it’s where the 200-week moving average rests.
If we do get a pop, beware of the 10-week moving average, which has been resistance lately. Over this measure and the 200-week moving average could get a push going toward the $68 to $70 area.
On the date of publication, Bret Kenwell held a long position in PINS.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.