What more do we need than the thick of earnings season? How about a Fed day? Let’s look at a few top stock trades as the markets continue to wade through what should — and could end up being — some real volatility.
Top Stock Trades for Tomorrow No. 1: PayPal (PYPL)
PayPal (NASDAQ:PYPL) will report earnings after the close on Wednesday. Ahead of the report, shares are pushing through to new highs. That is setting up for a difficult situation as it pertains to expectations.
However, PayPal has been a beast and it may have further to go. If it rallies on the print, look to see if it can clear and hold the 261.8% extension, up at $193.02. Above puts $200 in play.
On the downside, see if the 20-day moving average and uptrend support (blue line) buoy the stock. Below puts the two-times range extension and the 50-day moving average act in play as potential support.
Below that, and PayPal may need some more time before setting up on the long side again.
Top Stock Trades for Tomorrow No. 2: Spotify (SPOT)
Spotify (NYSE:SPOT) reported earnings before the open on Wednesday, but the stock is struggling.
The disappointing results are sapping its momentum, although bulls are giving it their best shot. Shares ended the day down less than 2% — and as one can see from the chart here, investors have bid Spotify up off its opening lows.
Unfortunately, though, bulls were unable to reclaim the 10-day and 20-day moving averages, two prior support marks that — at least for a day — are acting as resistance.
Over these marks, and a retest of the two-times range extension is possible, up near $285. Above that, and the high near $300 is in the play.
Below $250, however, and Spotify may come back down to the 50-day moving average. Keep in mind, this stock has been red hot over the last few months and may need to cool off if earnings were disappointing.
Top Stock Trades for Tomorrow No. 3: Aphria (APHA)
I highlighted a few cannabis stocks the other day, but avoided Aphria (NASDAQ:APHA) with earnings on deck. The stock moved really well over the prior two sessions, but paid the price on Wednesday.
Shares were down almost 20% on the day, and APHA stock is failing to hold the $5.25 level. Bulls will have their make-or-break opportunity soon, though.
Shares need to hold the $4.25 to $4.55 area. That’s where Aphria finds its 50-day and 200-day moving averages, along with uptrend support (blue line). The 20-day moving average comes into play just below $4.90.
The stock has been looking much better lately and if bulls are serious, they will keep the trend in play. Back over $5.25, and Aphria can start to fill some of this big gap. Below $4, and this one will likely be broken for a while.
Top Stock Trades for Tomorrow No. 4: Bank of America (BAC)
After drawing some buying interest from Uncle Warren, Bank of America (NYSE:BAC) has been trading much better over the last few days.
This is where things can get tricky, though.
Shares have been in a steep uptrend from the lows, as shown on the weekly chart above. But it’s coming into a key price area near $25.50. Just above is the 200-week moving average, near $26.
If BAC can reclaim these areas, the next upside target shifts to the declining 50-week moving average — which was resistance in June — followed by the May and June highs, near $29. Below $23 puts BAC below uptrend support, and puts the July low in play at $22.39.