The stock market is searching for direction after a robust multi-session rebound. That said, here are a few top stock trades to watch for Wednesday.
Top Stock Trades for Tomorrow No. 1: Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) continues to trade very well, up more than 50% from the recent lows to Tuesday’s high. However, many are beginning to wonder if the market is starting to roll back over, as bulls begin to lose momentum.
If that’s the case, we may seem NVDA come under pressure too. If the stock can’t push through $280 resistance, we need to see where support comes into play. My first downside level is $230. Below that and investors should keep an eye on the $200 mark. That’s where the 50-week and 100-week moving averages come into play.
For long-term investors, that would be an excellent buying opportunity. Below $200 puts the recent low near $180 in play. On the upside, a move north of $280 puts $300 on the table.
Top Stock Trades for Tomorrow No. 2: Broadcom (AVGO)
Another semi stock that opened strong but struggled in the afternoon is Broadcom (NASDAQ:AVGO). Shares thrust higher over $240, but fizzled out near $252.
If the stock can push through $240 and reclaim Tuesday’s high, it puts $260 on the table, followed by a test of some of its key moving averages up above.
On the downside, use caution if AVGO loses its 200-week moving average (drawn on the chart near $227). Below that puts $200 on the table. Remember, this stock was sub-$160 not that long ago. Investors have to use caution, as the VIX remains elevated and there’s no clear market direction at the moment.
Top Stock Trades for Tomorrow No. 3: Bank of America (BAC)
Bank stocks continue to take it on the chin and that includes Bank of America (NYSE:BAC). Above is a five-year weekly chart that shows the nearly 50% peak-to-trough decline investors have suffered through over the past few weeks.
After dipping down to $18, we’ve seen a quick rebound in BAC. However, the stock has not been able to sustain momentum above $24, which keeps a retest of the 200-week moving average off the table.
Over the last three weeks, BofA shares have been met by sellers near $23. That makes it hard to be a buyer, even if the valuation is low and dividend is attractive. A move below $21 could accelerate the selling pressure, putting $20 or lower on the table. Below $20 and a retest of the $18 low is possible.
I don’t know that we’ll get the chance, but from a technical perspective, Bank of America stock would look more attractive in the $16.50 to $17 area.
Top Trades for Tomorrow No. 4: iQiyi (IQ)
iQiyi (NASDAQ:IQ) was enjoying plenty of upside in mid-February, but it too got caught up in the selloff despite being a streaming video play.
After breaking out over $20 in December, IQ stock lost this mark in early March. This level and the 200-day moving average are now acting as resistance (blue circle), as shares now recoil lower.
Fortunately, that gives us our levels.
On the upside, bulls need to reclaim the $20 mark and the 200-day moving average to have a sustained rally. On the downside, see if IQ can avoid taking out the March lows. A higher low is not necessarily ideal because it means the stock will decline, but it’s at least constructive.
Below the March low is not constructive, and puts the 2019 lows in play near $15.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, he is long NVDA and AVGO.