The market made new lows on Monday but has finished higher each day this week so far. Can it make it a third straight higher close with the Fed on tap? Let’s look at a few top stock trades that are moving big on earnings.
Top Stock Trades for Tomorrow No. 1: Lyft (LYFT)
I think that’s safe to say that it’s a pretty bad day for Lyft (NASDAQ:LYFT). Losing about one-third of its value overnight does not bode well for investor sentiment.
Even worse, it’s cutting through its 78.6% retracement (as measured from the post-Covid high to the March 2020 low). It’s also slicing through the lows we saw in the second half of 2020 at $21.34.
If Lyft stock can’t hold the $20 level, then we could be looking at a potential test of the Covid lows near $14.50. I know it sounds absurd, but in a tape like this we simply cannot rule out anything on the downside.
On the upside, though, keep an eye on $21.50. If we can reclaim it, it may open the door back to the $25 to $26 zone. Above $26.75 and $30 could be in play.
Top Stock Trades for Tomorrow No. 2: Uber (UBER)
Like Lyft, Uber (NYSE:UBER) is not trading well on the day. However, the latter’s 8% loss looks mild compared to the haircut the former is taking. That said, Uber is now down 11% on the week.
With the decline, it’s knifing through the key $28.39 level. You may have noticed stocks breaking down below a number of long-time, key support areas. That’s what a bear market looks like in these stocks.
On the upside, I would love to see Uber stock reclaim $28.50 while keeping its post-earnings low intact.
That gives us a low to measure against — currently at $25.90 — and if it reclaims prior support, it could open the door back to $30-plus. The declining 21-week moving average has been active resistance, for what it’s worth.
That give us a risk-defined setup vs. trying to catch a falling knife, say by nibbling at the 78.6% retracement near $24.50 — a setup I don’t like very much but an area where I want to see how the stock handles, should it get there.
Top Stock Trades for Tomorrow No. 3: Starbucks (SBUX)
The weekly chart lays out Starbucks (NASDAQ:SBUX) really well, but the daily chart looks too good to ignore with the stock’s post-earnings gains on display Wednesday.
If Starbucks can hold a bulk of Wednesday’s gains, it will reclaim the 10-day and 21-day moving averages, as well as the 61.8% retracement. These are some meaningful measures.
On the upside, $85 is the next area to keep an eye on. There the stock finds its 50-day and 50-month moving averages. Just above that is the 50% retracement up near $88. A push above the April high near $92 could put $100 back on the table.
On the downside, a break of Wednesday’s low at $77.92 could open the door to a gap-fill near $75.80, followed by a retest of the lows near $73.50.
Top Trades for Tomorrow No. 4: Moderna (MRNA)
Looks like the love has faded for vaccine maker Moderna (NASDAQ:MRNA). The stock is about flat after reporting earnings, but it’s down big from the highs and struggling for momentum.
From here, bulls need to see this one regain this week’s high and the declining 10-week moving average. The latter has been active resistance.
On the plus side, we have an inside week so far, so it’s possible we get some sort of inside-and-up rotation going on the larger timeframes. If it can do that and gain some momentum, then maybe it can climb back to the $175 to $180 area.
On the downside, it’s simple: Watch the April low near $134.
If Moderna loses this level, and can’t regain it, the critical $120 to $122 area is in play. A break of that support level opens the door down to $100.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.