The market chop continues, although equities were pushing nicely higher on Thursday. Can the market build on its recent momentum? Let’s look at the charts of our top stock trades for Friday.
Top Stock Trades for Tomorrow No. 1: Tesla (TSLA)
Tesla (NASDAQ:TSLA) shares were slightly higher on Thursday after reporting earnings on Wednesday after the close.
The real losers on the day? Those who paid premiums for calls or puts looking for a big reaction. The winners? Premium sellers.
In any regard, the charts remain intact. The stock is maintaining above the 50-day moving average, which has been support since September, the first time Tesla had tested the 50-day in months.
If this level holds, investors will be looking for a breakout over $460. Above this month’s high at $465.90 and shares may make a run at the highs near $500.
If support gives way, the October low is on the table near $406. A close below $400 could put the $350 to $370 zone in play, along with the 100-day moving average.
Top Stock Trades for Tomorrow No. 2: AT&T (T)
After so much disappointment in AT&T (NYSE:T), investors are breathing a shallow sigh of relief. That’s as the stock rallied about 6% on earnings. However, it’s a shallow breath because this stock isn’t out of the woods yet.
The $27 level continues to hold as support, but what investors really need to see is the stock break out over the 10-week moving average. As long as it remains below this mark, it will have trouble rallying.
Above the 10-week could put $30 and the 200-week moving average in play. Below the 10-week moving average and $27 remains on the table.
Below $27 and this week’s low at $26.54 is vulnerable. If that level fails to hold as support, $25 could be back in the realm of possibilities.
Top Stock Trades for Tomorrow No. 3: Coca-Cola (KO)
Like Tesla, Coca-Cola (NYSE:KO) was only slightly higher on Thursday despite reporting earnings.
Also like Tesla, Coca-Cola is trying to breakout over resistance as it rides the 50-day moving average higher. Who would have thought that KO and TSLA stocks had so much in common, at least, technically speaking.
A close over $51.50 — and preferably $52 for good measure — would be enough to kickstart the move higher. It could put $55 in play and potentially higher if bulls really regain momentum.
If KO stock can’t break out, the 50-day moving average is support. A close below this mark puts the $48 area on watch. A close below $48 and its major moving averages does not bode well for longs.
I want little to do with Coca-Cola stock if it breaks this many support marks.
Top Stock Trades for Tomorrow No. 4: Lam Research (LRCX)
Lam Research (NASDAQ:LRCX) reported pretty solid earnings results, although I don’t think bulls are going to panic about a 1.5% drop after such a stellar run.
In fact, this is a very nice-looking little bull flag (blue lines) down to the 20-day moving average. The decline also filled the gap left from earlier this month. By most accounts, this is pretty healthy price action.
What I want to see now is a move back over the 10-day moving average (not shown on the chart above, but currently at $362). If we get it, odds are favorable for a long setup.
It would put $380 in play on the upside, followed by a possible breakout toward $400. On the downside, a close below the 20-day moving average and Thursday’s low would be the risk point.
On the date of publication, Bret Kenwell held a long position in T.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.