Stocks were stagnant in the first trading session of a holiday-shortened week, as U.S. stock started off higher at the open and fell flat in afternoon trading. It’s left traders craving some sort of break – either higher or lower – in order to get a better trading environment. Let’s look at a few top stock trades for Wednesday.
Top Stock Trades for Tomorrow #1: Gilead Sciences
Click to Enlarge On Tuesday, Gilead Sciences (NASDAQ: GILD ) was downgraded to a sell by Goldman Sachs, sending shares lower by 3.75%. It thrust the stock below uptrend support (black line), as well as the 20-day and 50-day moving averages.
Now what? A rally back to the $65 to $66 area and fail would set up shorts to push GILD stock lower. Should it continue falling, the $61 to $61.50 area could be next.
Top Stock Trades for Tomorrow #2: Advanced Micro Devices
Advanced Micro Devices (NASDAQ: AMD ) erupted on positive news for its new chip , sending shares higher by 10%. It broke the stock out of a multi-month downward channel, and put it over the 20-day and 50-day moving averages.
If AMD can take out April’s high at $29.95, a rally into the low-$30s is possible. On a pullback below $29, look to see that prior channel resistance holds as support, and/or the 50-day/20-day moving average, whichever comes first.
Top Stock Trades for Tomorrow #3: Teva Pharmaceutical
Shares of Teva Pharmaceutical (NYSE: TEVA ) are tumbling more than 12% on Tuesday, as the stock breaks to new multi-year lows. The stock blew through the 2017 lows earlier this month and continues to look downright dreadful.
A rally back to the $11 to $11.50 area and fail would set up a short signal for bears. At this point, there’s not much reason to get long TEVA, unless aggressive traders want to go long against Tuesday’s lows. That said, I would rather wait for some kind of reversal to brew in TEVA first.
American Airlines (NYSE: AAL ) is also off to a tough start. The stock has been putting in a series of higher lows and while a bounce from March sent the stock higher by about $5 from peak to trough, we’re right back where we started. Actually, we’re worse now.
Over the last few days, AAL has lost the vital $30 support floor that has led to numerous bounces in the past. Investors can play these bounces even into the face of a downtrend (purple line). However, they have to know when to step aside once support gives way.
Shares have now broken below this year’s lows, making a rally back $30 suspect. Should it act as resistance, expect sellers to push it back down for another test of the lows.
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