5 Top Stock Trades for Wednesday: S&P 500, AAPL, CBS, VIAB

Stock Market

The markets surged higher on Tuesday as the White House will delay its latest rounds of tariffs. That sent stock markets ripping higher, as bulls cheer the latest move. Let’s look at a few stocks that were catching our eye as our top stock trades.

Top Stock Trades for Tomorrow No. 1: S&P 500 (SPY)

The action in the S&P 500 is encouraging, with the index holding onto most of its morning gains. Framed on the chart above in black lines is the two-day trading range from the last big rebound on Aug. 8.

The Thursday-Friday range was important, as the S&P 500 — as well as the SPDR S&P 500 ETF (NYSEARCA:SPY) — was stuck between the 50-day and 100-day moving averages.

A break of either each had their own implications. In this case, a break of the 100-day put a decline down to the August lows and the 200-day moving average on the table. That was, unless the index was able to reclaim the 100-day, which it conveniently did on Tuesday.

Now back over the 100-day, bulls need to push the index back over the 50-day and 20-day moving averages to regain control. If they do, 3,000-plus on the table. The steadily weakening VIX is also a feather in bulls’ cap, although a close over 2,942 would help even more.

No. 2: Apple (AAPL)

Top Stock Trades for Tomorrow No. 2: Apple (AAPL)

Shelving the tariffs until mid-December is a big win for Apple (NASDAQ:AAPL) and it didn’t take long for investors to realize it, bidding up Apple more than 4%. Shares briefly penetrated the vital $210 to $212 zone, but failed to hold above it.

Bulls now need to push through this zone. If they can, it opens up the post-earnings highs of $220.50. If they fail to, AAPL needs to hold the 50-day on the downside.

While Apple did pull back with the rest of the market, it’s worth noting that bears weren’t really able to crack this one too badly amid the correction. Keep it simple: Above $210 is great, above the 50-day is good and below the 50-day is bad.

No. 3: CBS (CBS)

Top Stock Trades for Tomorrow No. 3: CBS (CBS)

The merger between CBS (NYSE:CBS) and Viacom (NYSE:VIA, NYSE:VIAB) is finally official, although the reaction is quite mixed. VIA stock (A shares) are down more than 6%, while VIAB stock (B shares) are up almost 2%. CBS stock is up ~1%.

The problem though? CBS wasn’t able to reclaim the 200-day and 20-day moving averages, with its intraday rally being sold into. Below the 200-day and prior uptrend support (black line) leaves $47 on the table.

A merger is usually good news, but without shares showing much strength, I’m not too encouraged by the action. Below the May lows opens up a can of worms.

No. 4: Viacom (B Shares) (VIAB)

Top Stock Trades for Tomorrow No. 4: Viacom (B Shares) (VIAB)

As for VIAB stock, it too failed to reclaim the 200-day moving average. What are the odds?

Anyway, shares are just above range support between $27.50 and $28. So long as that’s the case, bulls can justify a long position. However, below this mark opens up a decline down to $25.

No. 5: Advance Auto Parts (AAP)

Top Stock Trades for Tomorrow No. 5: Advance Auto Parts (AAP)

Advance Auto Parts (NYSE:AAP) hit new 52-week lows in Tuesday’s session after reporting its quarterly results. However, shares bounced hard off the lows and closed near flat for the session.

That’s constructive, although the new lows certainly aren’t. The good news is, bulls now have a few upside levels to consider and a level to measure against on the downside.

A close below the lows — currently at $130.09 — may very well usher in new lows. $130 is a reasonable stop-loss, although still below the 200-week moving average makes AAP a concern.

Should it reclaim the 200-week, look for a possible rebound up to prior range support at $150. I suspect this level will act as resistance, but we’ll have to wait and see if that’s the case, assuming it even gets there in the first place.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long AAPL. 

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