It’s been a bumpy and volatile week, and that’s no surprise when you look at the economic schedule. Amid all of the headlines, investors are looking at the hot stocks for tomorrow.
Even though earnings have died down a bit, there are still companies reporting their quarterly results. Additionally, the Federal Reserve is dominating the calendar.
On Wednesday, we received stronger-than-expected JOLTS data — job openings — and we’re also on day two of Fed Chair Powell’s testimony to Congress. The latter has really shed some light on the current inflation situation.
After hotter-than-expected jobs inflation and economic readings last month, the Fed is apparently planning to raise more than they previously expected. That’s no surprise, but it seems to be catching investors off guard.
Amid all that, let’s try to look at the hot stocks for tomorrow — Thursday.
Hot Stocks for Tomorrow: Advanced Micro Devices (AMD)
Semiconductor stocks have been trading quite well this week. That’s despite all the noise we’ve seen in the overall market lately regarding interest rates. Helping lead the charge is Advanced Micro Devices (NASDAQ:AMD).
The stock had a great response to earnings a few weeks ago but has since pulled back. It found support at a key level, and then quickly this week, it rotated over last week’s high. That was the trigger to get long.
While business has improved for this group, investors are looking for the bottom to be in and for growth to return. Combined with more bullish momentum in tech, semiconductor stocks have been leaders in the recent rally.
The Chart: As previously mentioned, AMD did a great job rotating over last week’s high at $81.63. Since doing so, the stock has promptly regained more than 70% of the recent dip. If it can continue higher, it opens the door back up to the recent highs near $89, and then potentially a much larger move up to the $97 to $99 zone.
Hot Stocks for Tomorrow: S&P 500 (SPY)
As if a two-day testimony for Fed Chair Powell to Congress wasn’t enough, we’ll get the non-farm payrolls report on Friday morning. While that could have easily left the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) for tomorrow’s piece (focused on Friday), I thought it wouldn’t be a bad idea to take a look at it right now.
The S&P 500 is nearing a key teetering point on the charts.
On the one hand, investors have been taught to not fight the Fed. That is, if the Fed is hawkish and raising rates, buying into those dips can be dangerous. On the flip side, when the Fed is dovish and accommodative, it often doesn’t pay to be a bear.
At least in the interim, the “don’t fight the Fed” mantra is clashing with the “don’t fight the trend” mantra. Even though the market is struggling to enjoy a sustained uptrend, it has been putting in a series of higher lows.
The Chart: SPY traded right down to the 61.8% retracement and 50-day moving average, where it’s trying to find support. If it can and pushes back above $400, then $404.50 and/or the 21-day moving average is in play.
A break of Wednesday’s low puts the mid-$390s back in play, followed by last week’s low near $392.30.
Trading in Chinese equities has improved, but there are still obstacles. For instance, JD.com (NASDAQ:JD) posted a large rally from the October low to the recent high but has since struggled badly over the past few weeks.
Shares doubled from the October low to the January high, but then pulled back almost 35%. Now, the company is due to report earnings on Thursday morning, and investors are unsure of what to expect.
Is the reopening of the Chinese economy going to be a positive for JD.com or will it benefit in-person businesses more? We’ll find out soon enough, although the recent action from Alibaba (NYSE:BABA) — down 10 of the last 12 sessions — isn’t doing much to lift investors’ spirits.
The Chart: JD stock has a lot of gaps to work with. On a bullish reaction, I’m watching $50 and the 21-day moving average, followed by $52.50 and $55 — conveniently, both levels are gap-fills.
As for the downside, I’m watching the recent low near $44, followed by the $40 to $40.50 area, which should be notable support.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.