After some wide swings thanks to the FOMC announcement, the broader stock market was down just slightly on Wednesday. With that in mind, let’s look at a few key top stock trades ahead of Thursday’s session.
Top Stock Trades for Tomorrow No. 1: Gold ETF (GLD)
Like seemingly every other asset, gold sold off in March. However, the yellow metal quickly rebounded once the Fed and other global central banks began printing money like crazy.
After a sharp bounce in April, though, gold and the SPDR Gold Trust ETF (NYSEARCA:GLD) has been trading in a sideways pattern. In mid-May, GLD gave investors a false breakout, as shares pushed above $164 before pulling back.
This setup looked like either a sideways range breaking to the upside, or an ascending triangle. It just couldn’t follow through, though.
However, over the past few sessions, GLD has reclaimed uptrend support (blue line), as well as the 20-day and 50-day moving averages. A continued push higher puts $164 resistance back in play. Above that, and the May high near $165 is possible. GLD closing near its high of day bodes well for bulls.
Back below the 50-day, however, puts last week’s low near $157 on the table.
Top Stock Trades for Tomorrow No. 2: Starbucks (SBUX)
Earlier this week, Starbucks (NASDAQ:SBUX) stock hit its highest level since February. However, a business update on Wednesday whacked the stock, sending it down 4%.
The decline also sent shares back below the 200-day moving average. Interestingly, the 20-day moving average is buoying Starbucks on the day, with the 61.8% retracement not far below that mark.
Should the stock lose the 50-day moving average, though, it likely puts the $71 area in play near the 50% retracement. On the upside, though, I want to see Starbucks reclaim the 200-day moving average. Above puts this month’s high in play at $83.62, as well as the 78.6% retracement near $84.
It’s also worth mentioning that the 50-week moving average comes into play at $83.41, and is currently rejecting the stock.
Top Stock Trades for Tomorrow No. 3: Tesla (TSLA)
Is anyone surprised we now have #TSLA1000? Tesla (NASDAQ:TSLA) stock started the week off with a gap-up and weekly rotation higher, something I called out right from Monday’s open.
Last week, shares gapped up then consolidated sideways. This week started off with another gap up, and now shares are following through on Wednesday — blowing through February’s high near $969, and clearing the psychologically important $1,000 mark.
On a pullback below $1,000, however, I want to see if Tesla can hold the $950 to $970 area as support. Below puts $850 and the 20-day moving average in play.
On the upside, though, let’s see if shares can climb to $1,115 — the 123.6% extension.
Top Stock Trades for Tomorrow No. 4: S&P 500 (SPY)
The S&P 500 continues to hold up really well, both after Friday’s 2.5% gap-up rally and after the more than 45% rally from the March lows. That gap up sent the SPDR S&P 500 ETF (NYSEARCA:SPY) up over the 78.6% retracement.
Now shares sit just below a key gap-fill area between $323 and $333. Filling this gap would eliminate the last one from the novel coronavirus decline, and put the SPY quite close to its all-time high.
On a dip, though, see if the 78.6% retracement acts as support. Below could put the low $300s and the 200-day moving average back in play. Even in that event — a 6.25% decline — it would be a healthy development for bulls.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long GLD.