Stock Market

Tuesday was a volatile trading session following comments from Federal Reserve Chair Jerome Powell. The market responded by ripping up and down and ultimately settling notably higher. Coming off that action, it has us looking at the hot stocks for tomorrow.

We are still in the midst of earnings season. Just because big tech has reported — and those stocks are mostly higher despite disappointing results — doesn’t mean there are not hundreds of companies left to report.

As we turn our attention to Thursday, earnings dominate the calendar once again.

Ticker Company Price
DIS Disney $111.56
CGC Canopy Growth $2.77
CZOO Cazoo $0.21

Hot Stocks for Tomorrow: Disney (DIS)

Click to Enlarge

Source: Chart courtesy of TrendSpider

When Disney (NYSE:DIS) last reported earnings in early November, the Street did not like the results. The company reported a top- and bottom-line disappointments and despite the impressive gains it put together for its streaming business, the stock moved lower.

Shares fell more than 13% in a single session in response. Despite a nice rebound, Disney stock went on to take out the post-earnings lows, eventually bottoming near $84.

As it comes into its earnings report on Wednesday evening, the stock is up an impressive 33% from the low. Can Disney deliver the goods? Will Bob Iger retaking the CEO seat give investors more confidence to bid the stock up?

So far, Wall Street has been quick to forgive disappointing quarters and reward good quarters.

The Chart: On the upside, $117.50 to $120 is a key focus area. That’s the 78.6% retrace and the gap-fill from August. Above that opens the door to $125 to $127.50. On the downside, bulls would really like to see Disney to see $100 hold as support.

Hot Stocks for Tomorrow: Canopy Growth (CGC)

Click to Enlarge

Source: Chart courtesy of TrendSpider

I have always considered Canopy Growth (NYSE:CGC) to be the go-to cannabis stock of the group. It had the best financials and seemingly best likelihood of maturing into a strong brand.

That said, cannabis stocks — including Canopy Growth — have struggled mightily. Shares recently made a multi-year low, trading for $2.09 in late December before the recent bounce.

Unfortunately, Canopy Growth is forecast to lose quite a bit of money in fiscal 2023 (this year). While analysts still expect a loss in fiscal 2024 — which starts later this year — it’s far lower than 2023. Further, consensus expectations call for single-digit revenue growth in FY 2024 versus an 11.4% decline in 2023.

So while not all is perfect for Canopy Growth, it appears the company is expected to move in the right direction. Now can management deliver, or will it show a regression?

The Chart: On the upside, keep a close eye on $3.40 to $3.50. That’s the 50% retrace and the declining 200-day moving average. Above $3.75 puts $4-plus in play, with clear current resistance sitting between $4.50 to $4.75. On the downside, CGC is already flirting with a loss of all of its daily moving averages. Below $2.50 could put the low back in play.

Cazoo (CZOO)

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Source: Chart courtesy of TrendSpider

While the buyers have returned to the stock market, they have not returned to Cazoo (NYSE:CZOO). At least, not in a way that has made bulls feel that great.

Even though shares are up more than 55% from the December low and are up 17% year-to-date, CZOO stock is still down 41% in the last three months, 78% in the last six months and 95% over the past year.

More recently, shares have been under pressure after a recent update for 2023. So it should come as little surprise CZOO is undergoing a reverse stock split. The company is scheduled for a 1-for-20 reverse stock split after the close on Wednesday and will begin trading on a split-adjusted basis on Thursday.

Ahead of the split, shares were down 18.5% at the low and are currently down about 8%. Clearly, the company is still struggling, but from a stock-price perspective, it will be in the focus tomorrow.

The Chart: The chart with CZOO is simple. On a pre-adjusted basis, the 20-cent level is key support. Below that puts 15 cents or lower in play. On the upside, bulls want to see CZOO clear 31 cents to 34 cents. Above that could put 40 cents to 42 cents in play.

Keep in mind, this penny stock should not be traded by most investors and is highly speculative.

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Read More:?Penny Stocks — How to Profit Without Getting Scammed

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 Publishing Guidelines.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.