Another poor economic report sent equities spiraling in Thursday morning trade. However, stocks rebounded from the morning lows, giving investors confidence a bounce may ensue. Let’s look at a few top stock trades.
Top Stock Trades for Tomorrow #1: Apple
Shares of Apple (NASDAQ:AAPL) failed to breakout over the $226 area, but are holding up well given the overall temperature of the market.
On a pullback, I was hoping to see the $215 level. Apple traded down to $215.13 on the day, before ricocheting higher back over $220. That’s just what the doctor ordered!
The $215 level and 50-day moving average are important for the bulls to maintain. Below opens up Apple to further selling pressure and technical damage.
From here, let’s see if AAPL can maintain above the 20-day moving average. If it can, another test of $226 could be in the cards.
Top Stock Trades for Tomorrow #2: JPMorgan
JPMorgan (NYSE:JPM) broke out to new highs last month, but has been struggling to maintain altitude. Unfortunately, the stock couldn’t hold up over prior resistance near $115, nor the 78.6% retracement and 20-day moving average.
However, after briefly breaking below the 50-day moving average, shares were able to recover. Let’s see how the bank does going forward. Does it bounce and rally up to the 78.6% retracement and 20-day moving average? Or do shares continue lower to the 61.8% near $109?
I would love a deeper correction down to the $106 area and 200-day moving average for a longer-term buy.
Top Stock Trades for Tomorrow #3: Snap
Snap (NYSE:SNAP) remains as volatile as ever. A September breakout reversed itself, temporarily plunging the stock in just a few days. Then in just eight sessions, shares went from almost making new highs, to falling more than 20% from peak to trough.
Man, this is a tough one to pin down. However, with Thursday’s reversal off the lows, bulls may consider a long position with a stop-loss either at the day’s low or at the 61.8% retracement, depending on how aggressive they want to be.
Holding above $14 is a good sign, and should Snap hurdle prior downtrend resistance (blue line), then a move back to the 78.6% retracement is possible.
Top Stock Trades for Tomorrow #4: Proofpoint
Relative strength is important because not only are these stocks holding up the best in a tough tape, but they are often the ones that do the best when the overall market comes back to life.
Notice how this one has been trading sideways between $130 resistance and $122/the 50-day moving average. A break over this range can send PFPT to the recent highs at $133, while a rally above can gain momentum as a possible breakout.
Top Stock Trades for Tomorrow #5: S&P 500
The iShares Russell 2000 ETF (NYSEARCA:IWM) bounced right where InvestorPlace readers where looking for and the SPDR S&P 500 ETF (NYSEARCA:SPY) posted a strong bounce on Thursday from an unsurprising location.
The stock held uptrend support from August (blue line) and the 78.6% retracement. We flagged this spot on Twitter in the prior session.
While some reprieve from the selling is welcomed by the bulls, a further decline down to the 200-day moving average and August lows would have been more enticing for a stronger reversal.
Failure to get there now only leaves it as a possibility for a later date. It doesn’t mean we have to test this level, but it would have been healthier price action in my view.
From here, let’s see if the SPY can reclaim the 50-day moving average and prior resistance from August. If it can’t, another test of uptrend support is in the cards. Over the 50-day puts the Fed-day low in the cards.
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