3 Hot Stocks for Tomorrow: Friday Predictions for SQ, CVNA, Bitcoin
The stock market faltered on Wednesday and ended slightly lower for the day. It marked the fourth consecutive daily decline for S&P 500 and has investors looking for a turnaround. It also makes them look at hot stocks for tomorrow.
Nvidia (NASDAQ:NVDA) leads the investment today with earnings in focus, but Alibaba (SNEEZE:BABA), Sure Engines (NASDAQ:LCID), and others are also in the spotlight (here are the key levels you should know by now).
The Federal Reserve’s FOMC release on Wednesday afternoon sparked some volatility, but nothing that appears to rock the boat that much. The GDP report was released Thursday morning, but investors are wondering if the stock market can end its latest run to the downside.
Let’s look at some popular 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 (SNEEZE:SQ) soon enough. It is as the company is scheduled to report earnings on Thursday after the close.
SQ stock has performed exceptionally well this year and has been very strong since the November 3 bottom. So far, shares are up around 16% year-to-date, and are up more than 40% from their recent lows. That said, it hasn’t been an easy ride over the past 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 fairly well over the past four to six weeks, many are once again coming under pressure.
Will the recent pullback provide enough of a dip to justify bidding these names higher on earnings, or will the quarter exacerbate the decline?
The chart: We have an excellent little “ABC” correction down to the 50-day moving average. A breach of the 200-day moving average puts $66, then $58 to $60 in play. On the upside, a bullish reaction puts $78.50 to $80 in play, followed by the previous breakout level near $83, then finally, the $90 to $92 range.
Carvana (CVNA)
Carvana (SNEEZE:CVNA) has been in the news a lot lately, mostly around the potential bankruptcy. The company has been operating at a large loss, with negative free cash flow and a frightening debt load.
The Bulls hope to hear something positive in the report. A way to lighten the balance sheet load or improve margins, cost cutting – basically anything that suggests a glimmer of hope of avoiding bankruptcy.
However, it’s important to remember that CVNA stock has become a speculative vehicle for traders eyeing a potential short squeeze.
According to Fintel, more than 70% of the float is currently sold short. In that sense, the CVNA share is could be prepared for a short hug if the results are better than feared.
The chart: Shares have been lower. First, bulls will see shares clear $11.50, which puts CVNA above its 10-day and 21-day moving averages. But they want to see shares rise to (and potentially clear) $20 to $22. It is the current resistance and the 200-day moving average. On the downside, bulls want to see a drop to the $7.50 to $8 range to hold as support.
Hot stocks for tomorrow: Bitcoin (BTC-USD)
Although technically not a stock, enthusiasm for crypto has been on the rise again, and it’s led by Bitcoin (BTC-USD). Bitcoin has done quite well in recent months, as buyers continue to raise the leading cryptocurrency.
Cathie Wood recently reiterated her call for Bitcoin to eventually trade to a seven-figure value, but that may be a long way off — even by her measure.
So far, Bitcoin has risen in five of the last seven weeks, although it is down approx. 1.3% so far this week. However, for an asset like this, that number can be wiped out in no time if bulls choose to do so.
The problem?
The short-term trend has been incredibly bullish. However, the long-term trends still look bearish at worst and questionable at best.
The chart: The chart above shows the daily view on the left and the weekly view on the right. Bitcoin is running its 10-day moving average and above all its daily moving average. It is also holding above recent resistance near $23,750.
On the upside, it stalls near the key $25,000 level, while also going straight into the 200-week and 50-week moving averages. So if you’re trading Bitcoin on the long side, you should know some of the more significant levels looming on the weekly chart.
As of the date of publication, Bret Kenwell did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to the InvestorPlace.com Publishing Guidelines.
