Another robust trading session has the S&P 500 threatening to run higher, especially if the index can stay over this ~2,800 level. That said, there were some big movers in both directions today, so let’s get a look at our top stock trades moving forward.
Top Stock Trades for Tomorrow #1: Aurora Cannabis
Shares of Aurora Cannabis (NYSE:ACB) were flying higher Wednesday, up almost 13% after it was announced that Nelson Peltz would be an advisor to the company. It thrust the stock over resistance near $8.
This mark had kept a lid on ACB over the last five months and as it gives way, there’s a lot of potential upside. Don’t forget, in October ACB was trading north of $10 while its 52-week high is $12.52.
Below $8 and there’s cause for concern among bulls. I would not be long this name below the 21-day moving average or uptrend support.
Top Stock Trades for Tomorrow #2: Roku
In the opposite direction we have Roku (NASDAQ:ROKU). This stud is still up 100% so far on the year, but a pair of downgrades on Wednesday morning knocked it down by $10 a share. Sheesh!
Clearly this doesn’t change Roku’s fundamental outlook, but the declines likely ushered in profit takers who have been long this stock for its post-earnings run. Now I need to see uptrend support hold and I want to see Roku stock close above the 21-day moving average.
If that’s the case, bulls may have a case to be long, but it wouldn’t be bad for Roku stock to digest some of this big move. A test of this $58 area would allow ROKU to retrace about 50% of its day-one earnings rally. Also worth pointing out is that Roku stock, at its lows on Wednesday, sat at the 61.8% Fibonacci retracement from its post-earnings range. See if it holds Wednesday’s low and reclaims the 21-day.
Top Stock Trades for Tomorrow #3: Rite Aid
What have we always said here on InvestorPlace? Do. Not. Invest. In. Rite Aid (NYSE:RAD)!
There’s a reason why as this name is volatile and circling the drain. Long or short can get both investors hurt and that’s why it’s been a no-touch for me for a long time. Notice on the chart that the stock couldn’t even get above $1 back in January.
An eventual delisting is likely and even today, RAD couldn’t hold its gains. I expect this one to take out 65 cents and if it does, it will likely go below its 52-week low at 60 cents. I’m not shorting, but I’m definitely not buying it.
Top Stock Trades for Tomorrow #4: Express
Another struggler, investors had a warning in Express (NYSE:EXPR) before Wednesday’s 10.5% post-earnings fall.
Notice the purple arrows on the chart. Arrow No. 1 told investors that support near $5.08 was no longer in play. Arrow No. 2 showed that the retest of support failed, just before earnings. Even if it had barely reclaimed support, the pre-earnings breakdown was warning enough with a name like this.
Now sub-$5 and I find little reason to stick with EXPR. Expect rallies to be met with sellers until the tide changes.
Top Stock Trades for Tomorrow #5: PayPal
After breaching $100, PayPal (NASDAQ:PYPL) stock is pulling back. It’s clear that momentum is bullish in PYPL and that makes it a solid buy-the-dip candidate.
It’s totally possible that we get more upside follow through above $100 on Thursday. Particularly given that shares are not yet overbought. However, I’ll be looking for an eventual pullback into uptrend support and the 21-day moving average. If we get it, bulls have a great risk/reward setup.
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.