Equities closed out last week with a bang. The large-cap-laden S&P 500 Index galloped to a new record closing high of $2,575.21. As the bull market beat rolls on, quality chart patterns continue to emerge. Opportunists on the lookout for the best trades each week have been treated to a plethora of choices, many of which continue to deliver.
For the chart-wielding trader, the best trades are those flashing bullish signals across a variety of technical indicators.
The trend is rising, volume patterns support buyers and a low-risk, high-reward setup has usually emerged. Indeed, buying dips to support or breakouts over resistance is the name of the game for many tactical traders.
I’ve scoured the market over the weekend and narrowed my focus to three all-star-quality candidates for the coming week. While it remains to be seen if they end up big winners, they sure do have clean setups.
Behold, three of the best trades on the Street.
The Best Trades on the Street: Salesforce.com (CRM)
Salesforce.com, Inc. (NYSE:CRM) has undoubtedly one of the sweetest setups on the Street.
One of the biggest benefits of the docile market environment is the ease with which textbook bullish patterns have formed and followed through. CRM stock has been locked in an uptrend all year long. The occasional dip has been bought, and breakouts have scored strong follow-through. Over the past two months, Salesforce formed a clean cup-and-handle formation. Friday’s high volume breakout signaled the pattern’s completion.
With CRM firing on all cylinders and just now breaking out, it’s undoubtedly one of the best trades for the week ahead. Buy the Dec $100/$105 bull call spread for $1.65 to capitalize on a potential run into year-end.
The Best Trades on the Street: Workday (WDAY)
The action in Workday Inc (NASDAQ:WDAY) has mirrored that of CRM. It has been trending higher all year long and sits well above rising 200-day, 50-day, and 20-day moving averages. The sharp ascent that kicked off last month and subsequent flag formed in recent weeks are completing the right side of a larger cup-and-handle pattern.
With Friday’s pop, WDAY is now a stone’s throw away from breaking out to new multiyear highs. The record highs near $116 from 2013 are beckoning, and I suspect at least a re-test is on the horizon. If WDAY can break above Friday’s high ($109.43), then bullish trades are worth a shot.
Buy the WDAY December $110/$115 bull call spread for $2.10.
The Best Trades on the Street: Snap (SNAP)
While our first two selections have been trending higher all year, Snap Inc (NYSE:SNAP) just recently bottomed. Up until August, SNAP stock was stuck in a downtrend, unable to get out of its own way. But there was enough bloodletting following its last earnings release to finally deliver a sustainable bottom. Since then, SNAP has climbed above its 20-day and 50-day moving averages, both of which are rising right now.
Perhaps the biggest positive is the mega-breakout that struck earlier this month on substantial volume. Since then we’ve seen a quiet little pullback delivering SNAP shares to a potential buy point.
To capitalize on continued strength, buy the Dec 15 calls for $1.60.
As of this writing, Tyler Craig held bullish positions in CRM. Want to learn how to master the art of option selling for high-probability cash flow? Check out Tyler’s recently released video series through Tackle Trading on how to systematically sell iron condors for monthly income.