Although able to rally off the morning lows, U.S. equities were under pressure Friday on renewed concerns over a potential trade war with China. Early Monday, stock market futures are down across the board with the Dow Jones Industrial Average set to open 212 points lower. On that note, here are our top stock trades going into this week before the bell Monday.
Top Stock Trades for Monday: Adobe (ADBE)
On Thursday after the close, Adobe Systems Incorporated (NASDAQ:ADBE) beat on earnings and revenue expectations. Despite another quarter of solid results, shares took a dip on Friday, likely on account of its 40% year-to-date rally.
The trend has been pretty obvious from the lower left to the upper right. In that sense, it’s a lot like Salesforce.com, inc. (NASDAQ:CRM). The 50-day serves as a pretty good proxy for ADBE. A retest-and-hold of this level would give bulls the green light to add to or initiate a new position in Adobe.
Top Stock Trades for Monday: Canada Goose (GOOS)
Canada Goose Holdings Inc (NYSE:GOOS) isn’t getting down on trade woes. Instead, shares are rocketing by more than 30% Friday after the company’s strong earnings result.
GOOS has been in a solid uptrend for the last 10 months and long-term investors are really celebrating after Friday’s big move. However, new investors would be wise to wait for a pullback or consolidation if they’re interested in GOOS.
With an RSI of 90 (green circle), now’s not a good time to get in. It could go higher, surely, but the odds don’t favor a great risk/reward at this point. Let’s wait on this one.
Top Stock Trades for Monday: Silver (SLV)
Silver looked like it was ready to go, teasing bulls with a breakout earlier this week. Instead, the iShares Silver Trust ETF (NYSEARCA:SLV) dove on Friday and is nearing a critical support level near $15.25.
Should this level fail, retests of recent lows near $14.80 and $14.50 are on the table. For bulls, it offers an attractive risk/reward to buy near $15.25. If SLV fails, they can bail with minimal losses.
Although I’ll admit, there’s not much else that enticing about the metal right now. I’d rather buy a breakout over downtrend resistance than buy into support with the hope that it holds. The SPDR Gold Trust ETF (NYSEARCA:GLD) was also weak on Friday and presents a similar scenario.
Top Stock Trades for Monday: Sogou (SOGO)
The Chinese internet stocks have been on fire. The ones we’ve been watching are Huya Inc – (ADR) (NYSE:HUYA), iQiyi, Inc (NASDAQ:IQ), Sogou Inc (NYSE:SOGO).
Focusing on the last one specifically, SOGO performed well on Friday, up more than 5% and outperforming some its peers after lagging for a few sessions. Shares went on to make new highs on Friday, but could not stay above $14.50.
So where to from here? Luckily, SOGO trades with easy-to-identify levels. $10, $11, $12, $13, etc. They’ve all played a role in the stock’s trading patterns. $13 is significant to me though. It’s the IPO price and if SOGO falls through $14, this become a must-hold level for bulls.
Granted, $12 could be support and so too could $11. But $13 being the IPO price would be a meaningful level for shares to find support. Let’s see if it does, if SOGO even falls that far. If so, it’d be a tempting buy.
Top Stock Trades for Monday: Roku (ROKU)
Roku Inc (NASDAQ:ROKU) is one that we nailed about a week ago. On a breakout over $40, we were looking for a run to $45 and if momentum kept up, possibly a test of $50.
Well, we hit $45 on Thursday and saw ROKU slip on Friday. Now what? Because ROKU has been doing so well lately, I would love to jump back in on a pullback into the low-$40s, perhaps near $42.50.
However, if stocks really come under pressure, Roku could slip down to $40. Should it hold, it’s a must-buy for bulls.
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 CRM.
