The stock market fluctuated on Wednesday, ending the day slightly lower. That was the fourth consecutive daily decline for the S&P500 and has investors looking for a turnaround. It also lets them look for hot stocks for tomorrow.
NVIDIA (NASDAQ:NVDA) leads the charge today with the result in focus, but Ali Baba (NYSE:BABA), Clear Engines (NASDAQ:LCID), and others are in the spotlight as well (here are the key levels to know right now).
The Federal Reserve’s FOMC release on Wednesday afternoon sparked some volatility, but nothing that seems to be shaking the boat too much. The GDP report was released Thursday morning, but investors are wondering if the stock market can end its recent downtrend.
Let’s look at some hot stocks for tomorrow – Friday.
Hot Stocks for Tomorrow: Block (SQ)
Just as all eyes are on Nvidia, Lucid and others this morning, they will be on block (NYSE:Q) early enough. The company is expected to report its earnings on Thursday after the stock market closes.
SQ stock has performed exceptionally well this year and has been very strong since its low on November 3rd. So far, shares are up about 16% year over year and have recovered more than 40% since the recent low. However, it was not an easy road last year.
Combined with its exposure to cryptocurrencies, Block is considered a growth stock, which has made it a target for the bears. While growth stocks have traded reasonably well over the past four to six weeks, many are coming under pressure again.
Will the recent pullback provide enough of a dip to justify taking higher gains from these stocks, or will the quarter exacerbate the pullback?
The graphic: We have an excellent small “ABC” correction down to the 50 day moving average. A break of the 200-day moving average brings $66, then $58 to $60 into play. On the upside, a bullish reaction brings in $78.50-$80, followed by the previous breakout level near $83 and finally the $90-$92 range.
Caravan (CVNA)
caravan (NYSE:CVNA) has been in the news a lot lately, mostly related to its potential bankruptcy. The company has operated with heavy losses, negative free cash flow, and an intimidating debt burden.
The bulls are hoping to hear something positive in the report. A way to lighten the balance sheet or improve margins, cut costs — basically anything that hints at a glimmer of hope to avoid bankruptcy.
However, it is important to remember that CVNA stock has become a speculative tool for traders who are eyeing a possible short squeeze.
More than 70% of the float is currently being sold short, according to Fintel. With that in mind, CVNA stock could be primed for a short squeeze if results are better than feared.
The graphic: Stocks trended lower. First, the bulls want the shares to scale above $11.50, which is putting the CVNA above the 10-day and 21-day moving averages. In reality, however, they want stocks to go up (and possibly clear) to $20-$22. This is the current resistance and the 200-day moving average. On the upside, the bulls want to see a dip into the $7.50-$8 range to hold as support.
Hot Stocks for Tomorrow: Bitcoin (BTC-USD)
While not technically a stock, enthusiasm for crypto has surged again, and that’s being led by Bitcoin (BTC USD). Bitcoin has fared reasonably well over the past few months as buyers continue to push the leading cryptocurrency higher.
Cathie Wood recently reiterated her call for Bitcoin to eventually trade at seven figures, but that may be a long way off — even by her standards.
So far, bitcoin has rallied in five of the last seven weeks, although it’s down about 1.3% so far this week. However, with an asset like this, this number can be erased on the fly if the bulls so desire.
The problem?
The short-term trend has been incredibly bullish. However, the long-term trends look bearish at worst and questionable at best.
The graphic: The chart above shows daily view on the left and week view on the right. Bitcoin is trading at its 10-day moving average and is above all of its daily moving averages. It is also holding above recent resistance near $23,750.
On the downside, it is flat near the very important $25,000 level while also running right into its 200-week and 50-week moving averages. So if you are trading Bitcoin on the long side, you should be aware of some of the more significant levels that are emerging on the weekly chart.
At the time of publication, Bret Kenwell held no position (neither directly nor indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s publicity guidelines.
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