As optimism rises for a phase-one trade pact between the U.S. and China, so too does the stock market. The S&P 500, Dow and Nasdaq all notched another new all-time high on Thursday. Let’s look at a few top stock trades going forward.
Top Stock Trades for Tomorrow No. 1: Roku (ROKU)
Shares of Roku (NASDAQ:ROKU) were in the spotlight Thursday, after the company fell more than 17% near the open. That decline comes despite the company reporting better-than-expected quarterly figures.
ROKU stock is trying to make a stand, though. Shares are reclaiming the 100-day moving average, the 38.2% retracement and the August gap-up level near $119.
The setup here is simple — just take it one level at a time.
If Roku continues higher, see how it handles the 50-day moving average. Above it and the 23.6% retracement near $141 is in play. Should shares lose the 100-day moving average and 38.2% retracement, its next stop may be $110, followed by the 50% retracement near $101 and the 200-day moving average at $95.50.
Top Stock Trades for Tomorrow No. 2: Square (SQ)
Square (NYSE:SQ) didn’t close at its highs, but it did jump on earnings. However, the stock is running into a roadblock.
Shares continue to put in a series of higher lows, forming a nice uptrend (blue line). It’s also holding up over its 50-day moving average and 78.6% retracement, right near that uptrend line.
Over $64 is constructive, but over $66.50 is certainly more bullish. That would put the stock over a significant level, as well as the 100-day moving average. It opens the door to the 200-day moving average up over $69.
Bulls might wait for a move over $66.50, or for a pullback into $61 that holds as support. Below $60 is a no-go.
Top Stock Trades for Tomorrow No. 3: Wynn (WYNN)
Wynn Resorts (NASDAQ:WYNN) initially recoiled on earnings, but is holding up over its 61.8% retracement near $125.
The trade? Below Thursday’s low, and the 200-day moving average is in play. Above downtrend resistance (blue line), Wynn shares could really take off. The 78.6% retracement near $135.70 would be the next upside target.
Keep it simple. Overly complicated setups or trades with a lot of “technical conflict” can be difficult and choppy. We like clean moves that come off simple setups. Wynn is a prime example. Remember, if this, then that.
Top Stock Trades for Tomorrow No. 4: Baidu (BIDU)
Shares of Baidu (NASDAQ:BIDU) are rallying to $120 on Thursday. Like Wynn, traders would do best to keep it simple.
If it can stay over $120, the June high of $121.80 is on the table. Above that gets Baidu stock up toward a potential gap fill (blue box) and the 200-day moving average over $131.
Falling below $120 puts Thursday’s low near $115 on the table. Should shares trade below that the latter, a fill down toward $108 is possible, while the 50-day and 100-day moving averages are just below that, between $105 and $107.50.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long ROKU.