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5 Top Stock Trades for Friday Morning

Here are the top stock trades we're watching for Friday morning

top stock trades - 5 Top Stock Trades for Friday Morning

President Trump decided to pull out of his meeting with North Korean leader Kim Jong Un and that’s left stocks under pressure. Here’s our top stock trades as a result.

Top Stock Trades for Tomorrow #1: Advanced Micro (AMD)

Top stock trades for AMD
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Source: Chart courtesy of StockCharts.com

I love when a stock shows strength in the face of a market decline and Advanced Micro Devices, Inc. (NASDAQ:AMD) has been doing it all week. AMD was able to not only hold up on Thursday, but actually push through resistance.

Although the initial rally comes with little surprise, it’s hard to take a new position now, isn’t it? 

Shares have rallied from $9 to more than $13, are overbought in the short-term and have momentum that’s likely to wane. Still that breakout over resistance is looking clean. Longer-term swing traders or investors bullish on the fundamentals can stay long AMD.

If anything, look to see if $13 holds as support. If it does, investors can go long.  

Top Stock Trades for Tomorrow #2: J&J (JNJ)

Top stock trades for JNJ
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Source: Chart courtesy of StockCharts.com

Johnson & Johnson (NYSE:JNJ) is not having the same luck as AMD. This blue-chip healthcare name continues to struggle despite its solid fundamentals and reasonable valuation.

Despite a fragile strip of support near $122, JNJ may be headed lower. Between $117.50 and $120 there should be decent support. It’s 2.95% dividend yield will roll up to 3% at that point, which should also aid in share price support.

Top Stock Trades for Tomorrow #3: PayPal (PYPL)

Top stock trades for PYPL
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Source: Chart courtesy of StockCharts.com

PayPal Holdings Inc (NASDAQ:PYPL) is a textbook setup. In fact, it’s exactly what the bulls in AMD should want to see.

After breaking out over downward resistance, PYPL stock pulled back into that level and found it as support. That’s as good of a green light as traders are going to get in the stock market. When resistance becomes support or support becomes resistance, low-risk trade setups appear.

A close below this trend-line is bad news, while above is good. The next target should be $86.

Top Stock Trades for Tomorrow #4: Ulta Beauty (ULTA)

Top stock trades for ULTA
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Source: Chart courtesy of StockCharts.com

After bursting through downtrend resistance in April, Ulta Beauty Inc (NASDAQ:ULTA) didn’t slow down much. The move through $220 carried on to a rally above $250 within just a few weeks.

Now consolidating and working off its short-term overbought condition, it’s important that ULTA finds support. Near $245, it appears to have done so.

A close below this level will flash a sell-signal to short-term bears. So long as it holds above, taking out the recent highs near $260 is in the cards.

Top Stock Trades for Tomorrow #5: Disney (DIS)

Top stock trades for DIS
Click to Enlarge
Source: Chart courtesy of StockCharts.com

Walt Disney Co (NYSE:DIS) saw an unfortunate move in its stock price Thursday, as shares fell about 1%.

For a stock that’s spent most of its time between $98 and $106 this year, the charts are surprisingly complicated.

DIS stock either broke through downtrend resistance and then failed to hold, or it failed to breakout altogether, depending on which of the two purple trend-lines investors use. Either way, it doesn’t matter much as it shows the bears still have more control than the bulls.

$102 support (drawn in blue) is decent support, although $98 (in black) is far stronger.

So what do investors do? Despite the stock trading terribly, DIS continues to churn out blockbuster after blockbuster and its valuation is quite reasonable. It’s likely Disney’s deal to buy Twenty-First Century Fox Inc (NASDAQ:FOX, NASDAQ:FOXA) that’s tying up the stock price.

From a trading perspectively, I would either look to buy at $98 on a slightly deeper pullback or consider selling some out-of-the-money puts. Maybe better yet, find a better stock to trade. There’s not much here in terms of confidence for DIS — in either direction.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell held a position in JNJ and DIS. 

Article printed from InvestorPlace Media, https://investorplace.com/2018/05/5-top-stock-trades-friday-morning-amd-pypl-dis-jnj-ulta/.

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