5 Top Stock Trades for Wednesday: BA, AVGO, ETSY, NIO, AGN
A positive trade-war tweet from President Donald Trump sent stocks soaring on Tuesday, although there is some hesitation now as investors turn to the Federal Reserve meeting on Wednesday. Will it end the rally or ignite it even higher? Let’s look at some top stock trades.
Top Stock Trades for Tomorrow No. 1: Boeing
An improving trade situation is big for Boeing (NYSE:BA), but so is the Paris Air Show. The company landed a deal with Amazon (NASDAQ:AMZN), another with Korean Air, and can look to move forward on a massive deal with Chinese airlines should the trade war take a few positive steps forward.
That’s being reflected in the charts, with Boeing stock jumping more than 0.9% on Tuesday.
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It’s an important move, with BA stock over $360-range resistance for the first time in a month and over the 50-day moving average for the first time since March, when the 737 MAX incident occurred. It’s also hurdling its 200-day in the process.
$380 seems like a reasonable first target, with $400 as the next level beyond that. Back below $360, traders my want to stop out.
Top Stock Trades for Tomorrow No. 2: Etsy
Etsy (NASDAQ:ETSY) stock tried to push through $70 resistance and couldn’t do it — even on a day where tech stocks are up big.
However, it’s holding the 20-day and 50-day moving average confluence, which bodes well for short-term dip-buyers. Investors who take a shot here need to see uptrend support (purple line) hold if the 50-day fails as support.
Others may wait for a breakout over $70, which could send Etsy stock to its March highs near $73.35, and higher should it rally above it. Is Etsy the next Amazon?
Top Stock Trades for Tomorrow No. 3: Nio
Nio (NYSE:NIO) stock is up big, following along with the rally in Tesla (NASDAQ:TSLA) and as Chinese stocks catch a bid. Once Nio lost $6, this thing was headed for the dumpster, but I didn’t expect a fall this far.
In any regard, shares are up more than 5% and were up as much as 10% on Tuesday. I want to see two things should NIO keep rallying. One, can it get back through prior downtrend support? Two, can it get through the 20-day moving average?
Above these areas and Nio can get some upside traction. If they act as resistance, though, the $2.50 level is still on the table.
Of all the stocks out there, Nio is not one I enjoy right now. It’s in the dumpster when the market is near all-time highs. There are better picks out there than this speculative name, at least for my tastes.
Top Stock Trades for Tomorrow No. 4: Broadcom
Last week, Broadcom (NASDAQ:AVGO) took a beating after reporting earnings and going through the conference call. That call put a beating on the rest of the semiconductor space as well.
But now? Now AVGO stock looks angry.
Up 5% on Tuesday thanks to the improving trade war rhetoric — just think what the chip space would do on news of a trade war agreement — AVGO stock is back into $280 resistance.
If $280 again acts as resistance, I want to see the 200-day again hold as support, along with uptrend support (purple line). Above $280 and I want to see AVGO run up to the 50-day. Over that mark and a move to $300 or more is possible. But remember, the company just disappointed on guidance, so there may be some hesitancy for the market to bid this one up too high.
That said, it has a low valuation, plenty of free cash flow and a big dividend. If the trade war rhetoric continues to improve, AVGO likely moves higher.
Top Stock Trades for Tomorrow No. 5: Allergan
I do not like stocks that are locked in massive downtrends, like Allergan (NYSE:AGN). Plus, we highlighted a few healthcare charts that looked good yesterday, like GileadSciences (NASDAQ:GILD).
Notice all of AGN’s major moving averages heading lower, as well as its series of lower lows and lower highs. Downtrend resistance (blue line) is still going strong too.
Should AGN hurdle downtrend resistance, look to see how it handles the 20-day. If it’s not resistance, a move up to $130 is possible, although I expect it to draw in some sellers. Even if AGN can get there, the 50-day will likely be in play as potential resistance too, seeing as though it’s currently at $135 and losing altitude.
On the downside, watch the recent lows near $115. Below it and AGN can fall even further.
I’m not saying this one is a total zombie or that it won’t do well over the long term. Only that from a trading perspective, it’s easier to sell stocks into resistance when they’re in downtrends and buy stocks into support when they’re in uptrends. Until AGN changes its tune, it’s in a downtrend.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long AMZN and AVGO.
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