4 top stock trades for Wednesday: AVGO, AMD, ARKK, ZTS
It was an interesting day on Tuesday, with tech stocks getting steamrolled, but the broader market — like the $S&P 500 index(.SPX.US)$ and $Dow Jones Industrial Average(.DJI.US)$ — holding up relatively well. With that in mind, let's look at a few top stock trades for Wednesday.
Top stock trades for today No. 1: Broadcom
Looking at a chart of $Broadcom(AVGO.US)$ is very calming at the moment. While the rest of the market is struggling, this stock gave us exactly what we were looking for: A retest back to the 10-day moving average.
Broadcom stock burst higher in December on better-than-expected earnings, then chugged its way up to new all-time highs. Finally we got a pullback and tag of the 10-day, which the stock energetically reacted to on Tuesday.
From here, I would love to see the stock push into the $675 to $677 area, putting new highs in play if it can clear this zone. Ultimately, $700 to $710 could be in play.
On the downside, however, a break of Tuesday's low at $657.23 could put the $645 level in play, along with the 21-day moving average.
Top stock trades for today No. 2: Advanced Micro Devices
After a great day on Monday, $Advanced Micro Devices(AMD.US)$ got slugged on Tuesday. Shares broke below the 10-day, 21-day and 50-day moving averages.
From here, I have my eye on the 10-week moving average, currently near $139.50. If the stock can't hold this measure, the $130 to $135 area isn't out of the realm of possibility.
On the upside, though, bulls need to see the stock reclaim the 21-day and 50-day moving averages and last week's low at $143.55. If it can do that, perhaps it can work its way back up toward the $150 area.
Top stock trades for today No. 3: Ark Innovation Fund
I keep looking for a potential bottom in the $ARK Innovation ETF(ARKK.US)$, but it just can't seem to find any upside momentum.
While ARKK was putting in a few higher lows, it was also putting in a series of lower highs, while struggling with its short-term moving averages. Now it's below both the 10-day and the 21-day moving averages and potentially gearing up for a test of the low near $89.
A break of this level — and preferably a gap below it — on bullish divergence (via the RSI reading at the bottom of the chart) would give bulls an opportunity for a reversal if ARKK can then reclaim $89.
Otherwise, there may be one last flush left in this one. If that's the case, the $175 level could be in play, along with the 200-week moving average.
Top trades for today No. 4: Zoetis
$Zoetis(ZTS.US)$ stock broke out over the $226 area in early December, held this level and the 10-day on a dip, then exploded higher. Shares nearly hit $250 amid the run, but suddenly, it's under pressure.
Shares have shed more than 10% of their value in just four sessions on seemingly no meaningful news.
That sent ZTS right through the 10-day and 21-day moving averages. Now trying to firm up on the 50-day, I think there's a bounce play at hand here.
On the downside, I want to see Zoetis hold last month's low, near $219. On the upside, let's see if it can reclaim $230 and test into the 21-day moving average. Above the 10-day and 21-day could put $240-plus on deck.
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