Stocks are trying to stage a rally on Thursday, even as worries persist over Credit Suisse (NYSE:CS), regional banks, interest rates and more. Going into the last day of the week, investors are looking at hot stocks for tomorrow.
Drilling down into specifics, the Federal Reserve will soon be in focus, as it’s expected to announce an interest-rate decision next week. It follows the European Central Bank’s decision to raise interest rates by 50 basis points on Thursday.
Further, Friday is a big options expiration week, known as “triple witching.” That’s the expiration of stock options, index futures and stock index options all on the same trading day. It can create extra volatility.
With that in mind, let’s look at a few hot stocks for tomorrow — Friday.
Hot Stocks for Tomorrow: FedEx (FDX)
FedEx (NYSE:FDX) is set to report earnings on Thursday evening. Just a day ago, on Wednesday, the stock hit its lowest level since Jan. 31. So clearly, momentum has not been favoring FedEx.
For what it’s worth, United Parcel Service (NYSE:UPS) reported earnings on that same day (Jan. 31). The results sent shares roaring higher, gaining about 4.7% that day and ultimately rallying about 10% before the broader market selling pressure caught up to it.
FedEx management should be able to provide some interesting insights into the consumer. Guidance will be important, as investors will want to get a sense of how the company will do going forward — and how consumers and businesses are handling the current environment.
While shares do trade at less than 15 times earnings, investors will want to hear the company’s guidance before deciding whether that’s cheap enough to justify a long position.
The Chart: Ideally, bulls will see this stock stay above $190 by the end of the week. $190 to $195 contains this week’s low, as well as the 200-day moving average and prior resistance from January. A break realistically puts $184 in play, followed by $180.
On the upside, bulls are craving a move over $213, potentially triggering a much larger breakout.
Hot Stocks for Tomorrow: Xpeng (XPEV)
Another earnings focus, Xpeng (NYSE:XPEV) will report its results on Friday morning. Outside of Tesla (NASDAQ:TSLA), EV stocks have really struggled over the last few quarters. Specifically in 2023, it has not been a kind year to these stocks so far.
In fact, just this week, Nio (NYSE:NIO), Xpeng, Rivian (NASDAQ:RIVN) and others have made new 2023 lows. That’s not encouraging — not in the least bit! — although it does lower expectations ahead of earnings.
Lower expectations increases the odds that Xpeng won’t disappoint investors. However, that does not mean there will be a favorable reaction to earnings.
Clearly, there are concerns among investors, particularly as it relates to EV stocks, but also more broadly in regards to the economy. Investors will want to hear about strong demand, steady production and a focus on costs.
The Chart: XPEV is clearly in a downtrend and is below all of its key moving averages. It just about filled that gap at $7.62. A break of $7.50 (and especially a close below it) opens the door down to $6.90, then $6.25.
On the upside, bulls would love to see shares clear downtrend resistance and the 21-day moving average, near $8.80 to $9.
Saving the biggest for last, we have Apple (NASDAQ:AAPL) and its $2.45 trillion market capitalization. Many are wondering what’s going on with Apple and why it’s on this list.
There are no scheduled events for Apple that I can see, (unlike last week with its annual shareholder meeting). Instead though, we’re talking about the largest US stock in the wake of enormous market-wide volatility.
Despite the regional banking crisis sending the CBOE Volatility Index (VIX) — the so-called “fear gauge” — higher by 50% in two days, tech stocks have been remarkably resilient this week. Just look at Apple. If it closes higher on Thursday, it will mark the stock’s fourth-straight daily gain, rallying each day this week.
Granted, it’s trading into a key resistance area, but the action is still constructive and impressive given the macro backdrop. On Friday, we’re looking to see if it can maintain momentum and potentially break out.
The Chart: Generally speaking, Apple continues to struggle with the $155 to $157 area. More specifically, it has been struggling with the 61.8% retracement at $156.29. If the stock can break out over this level — and ideally clear $157 — it could put the $165 level in play.
On the downside, bulls want to see Apple stock hold $150, as well as its 10-day and 21-day moving averages. However, the stock’s “need to hold” level is $147.61. That’s this week and last week’s low (approximately), as well as the 200-day moving average.
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.