Stocks continue to creep higher as the earnings reports continue to roll in. With that in mind, let’s look at a few of those earnings plays as our top stock trades.
Top Stock Trades for Tomorrow No. 1: Disney (DIS)
Despite a not-so-great earnings headline, Disney (NYSE:DIS) stock is ripping higher. It helps that its streaming platform is doing quite well amid the novel coronavirus outbreak.
The chart was setting up in a very indecisive manner ahead of earnings. And while the overall market has been trekking higher, Disney shares were wedging sideways. That is, making a series of lower highs and higher lows. Traders needed that pattern to break one or the other before taking a stake.
That break is taking place to the upside. As long as shares can hold over the 61.8% retracement and the 200-day moving average, it could continue higher. Currently shares are struggling with the June highs near $127.82.
Above Wednesday’s high at $130.31, and perhaps the 78.6% retracement will be in play up at $136.78, as well as the February gap-fill up near $139.
Top Stock Trades for Tomorrow No. 2: Square (SQ)
Up almost 16% at one point on Wednesday, Square (NYSE:SQ) is having trouble holding onto its post-earnings gains. The company surprised investors with a top- and bottom-line beat and an early release of its quarterly results.
The news has shares gapping higher on the day, but struggling to stay in the $150 range. If the fade continues, see if the two-times range extension acts as support near $142. Below puts the $135 breakout level in play, along with what has been strong trend support at the 20-day moving average.
If Square stock can reverse higher and take out the post-earnings high at $158.43, it paves the way for more upside. Specifically, traders will be looking at the 261.8% extension up at $176.11.
Top Stock Trades for Tomorrow No. 3: Roku (ROKU)
Roku (NASDAQ:ROKU) used to be the go-to name for growth investors, but after gapping up and exhausting itself on earnings a year ago, the stock has slowly been making its way back higher.
A few days into July, Roku finally broke out over downtrend resistance (blue line), which has been in play for almost a year. After consolidating for the rest of the month, Roku stock has begun to break higher once again.
Will earnings douse the new fire with water or gasoline?
On a move higher, I want to see Roku clear and close above the prior 2019 high at $176.55. Above puts a move toward $200 in play.
Not only is this level psychologically relevant, it’s also near where the 123.6% extension comes into play at $204.48 (when measuring from the March low to the 2019 high). When measuring from the March low to the 2020 high, the 138.2% and 161.8% extensions come into play at $186.72 and $208.66, respectively.
On the downside, I’d like to see the 20-day moving average act as support. Below puts the July low in play at $145.17, followed by a possible test of the 50-day and 200-day moving averages.
Top Stock Trades for Tomorrow No. 4: Moderna (MRNA)
For such a wild mover, Moderna (NASDAQ:MRNA) is awfully quiet after earnings. More so, the stock is actually trading slightly lower despite beating on earnings and revenue expectations.
However, we take our cues from the charts and right now, they are not flashing a big buy signal.
They could be soon, though. The $73 area continues to act as support. A move below likely puts the 50-week moving average in play.
On the upside, this stock could really get moving if the technicals align. Above Tuesday’s high (so a two-times daily-up if it happens on Thursday) at $78.62 could trigger a larger rotation higher — particularly as it would put MRNA over the 10-day and 20-day moving averages.
That could put the $82.50 to $85 zone in play and potentially higher depending on what type of momentum we’re dealing with. In any regard, wait for the price action to confirm this development rather than buying and hoping it comes to fruition.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret is long ROKU and DIS.