Stocks started the second quarter off on the wrong foot, tumbling lower on the day. That said, here’s a look at a few top stock trades now.
Top Stock Trades for Tomorrow No. 1: Microsoft (MSFT)
Microsoft (NASDAQ:MSFT), the largest holding in the SPDR S&P 500 ETF (NYSEARCA:SPY), is starting to roll over. Shares failed to hold up over the 100-day moving average and were swiftly rejected by the 50-day moving average.
Let’s see how the stock does on a slightly deeper decline, down to the $150 mark and the 200-day moving average. If this zone fails to buoy the stock, more downside could be in a store.
I would love to see another test of $140 to see how Microsoft holds up. If $140 steps in as support, MSFT should avoid a retest of the lows near $135. Below both levels puts $130 in play. A pullback to prior resistance that holds as support is not only healthy price action, but would be a constructive development as investors get a higher low to work with.
On the upside, though, see if the stock can reclaim its 100-day moving average. Above that, and the 50-day moving average is in play.
Top Stock Trades for Tomorrow No. 2: S&P 500 ETF (SPY)
Speaking of the SPY ETF, let’s take a closer look at the stock.
Last night I flagged a very similar chart, but also highlighted that SPY was failing at its 200-week moving average. On the daily chart above, you can see that the 20-day moving average acted as resistance, as did the 38.2% retracement for the 2020 decline (which is also the 52-week range).
Shares are now struggling to hold the less-important 23.6% retracement. Below that mark and the Q4 2018 lows near $233.75 are in play. If those hold, bulls may view it as a buy-the-dip opportunity with a higher low in place. If it fails to hold, it puts the 2020 lows in play just below $220.
Top Stock Trades for Tomorrow No. 3: AT&T (T)
At the start of the selloff, AT&T (NYSE:T) was holding up okay. But the selling pressure got to this stock, too — which has since fallen below $30. It’s had trouble reclaiming this mark, as it moves down into the upper $20s.
Last week, the $26 mark propelled shares higher, but a retest of that low isn’t out of the question right now. If that level breaks, the $25 mark is in play, which as has been multi-year support for some time now.
On the upside, however, let’s see if AT&T can reclaim $31. Above that puts its 100-week and 200-week moving averages in play between $32 and $32.50. Above that and the mid-$30s are on the table.
Top Stock Trades for Tomorrow No. 4: Peleton (PTON)
There was no love for Peloton (NASDAQ:PTON) when the company went public in September. Up almost 10% on Wednesday and after surging from its lows near $18 in March, PTON is clearly back in favor.
The stock is approaching its $29 IPO price, which has been resistance over the past few months. Above this mark and downtrend resistance currently near $31.50 is in play. Above that and $34 is possible.
On a pullback, see if Peloton can find support between $24 and $25. Below puts $21 on the table. Below that and the March lows are in play, where buyers previously stepped in over several sessions.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long T.