With the exception of small caps, major U.S. stock indices took a breather this past week. That actually bodes well for the bull case, in my opinion. With that in mind, let’s get a look at our top stock trades for this week.
Top Stock Trades for Monday #1: PayPal (PYPL)
PayPal Holdings Inc (NASDAQ:PYPL) made a deal to buy iZettle for $2.2 billion to get into the small business payment space. Worth noting is that Square Inc (NYSE:SQ) recovered from its early losses on the session.
The deal vaulted PYPL stock over downtrend resistance, a level it initially broke over on Thursday but failed to close above. With the move, bulls can take a new position, with a look for support to come into play on the back of that prior resistance line. The 50-day and 100-day should also give support.
Assuming these levels hold, bulls should have three targets in mind: $84, previous highs near $86 and new all-time highs.
Top Stock Trades for Monday #2: Baidu (BIDU)
Just when it looked like Baidu Inc (ADR) (NASDAQ:BIDU) was breaking out over that $260 to $270 level, it had to disappoint. The company’s COO is stepping down, fueling a 9% drop in the stock price.
Is it an overreaction? Possibly, but let’s look at the charts. The hope for bulls at this point is that the $250-ish level can stabilize BIDU stock. If not, it’s got its three major moving averages between $242 and $245.
If BIDU cuts through these support levels, $215 to $230 could be in the cards. At this point, we don’t know where support will come into play. Let’s let BIDU stock show us where it’s at over the next few days.
Top Stock Trades for Monday #3: Nordstrom (JWN)
Nordstrom, Inc. (NYSE:JWN) stock dumped 10% after the company reported earnings on Friday morning.
It’s now near must-hold support at $46. Should JWN fail to bounce, it will break below the 200-day moving average. That puts $44 and possibly lower on the table. I don’t want to dip my toe in until I know $46 will hold.
I’d rather be late to the party and enjoy the good times than show up early and be committed to an unfortunate spot.
Top Stock Trades for Monday #4: Deere (DE)
It’s good to see Deere & Company (NYSE:DE) stock get some mojo back. Friday’s earnings report is only helping to fuel its bounce off the lows earlier this month. But where to now?
Shares hit a brick wall at the 100-day moving average, but DE’s push over $152 was impressive. I would personally rather buy on a pause/pullback to the lower $150s, but maybe I’m just being picky.
DE stock looks like it can higher from here.
Top Stock Trades for Monday #5: PepsiCo (PEP)
My oh my, what happened to PepsiCo, Inc. (NYSE:PEP) stock? Shares of Pepsi have been in a near-constant state of decline for almost four months now.
Thankfully, the end may be near.
Shares of the drinks and snacks conglomerate have tumbled more than 20% from its 2018 highs. However, the $95 to $97 level has been multi-year support. With momentum via the MACD (yellow circle) showing a potential handoff to the bulls, PEP could put in another bottom near this level.
If this area holds up as support, that’s great. But it doesn’t mean PEP is out of the woods.
The declining RSI (blue circle) is still a concern, as is PEP being under all three major moving averages. However, rarely over the past ten years has Pepsi stock maintained a dividend yield above 3%. That’s not to say it can’t pay it, but rather, investors usually gobble up enough of the stock where it typically yields 2.25% to 2.75%.
At 3.3%, this level seems too high for PEP. Either way, it’s a low-risk bet for new investors buying today, as they could bail on a break of $95 if they want to limit their exposure.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities.
