Stocks eked out gains ahead of the G-7 summit in Canada, something many investors were and likely still are worried about.
Further trade rifts over the weekend could shake up the markets this week, while a lack of trade worries could green light a further rally. Let’s see how we’re positioning our top stock trades for next week:
Top Stock Trades for Tomorrow #1: Huya (HUYA)
Huya Inc – ADR (NYSE:HUYA) exploded higher Friday, climbing about 15% and eclipsing the $34 mark. After pricing its IPO at $12, Huya is working on becoming a triple despite being a public company for less than one month.
Just this week we took a look at Huya after its impressive earnings results. Despite a top and bottom line beat, investors were selling the name. With just a $6 billion market cap, triple-digit revenue growth, almost 100 million active users and profitability, it was a quandary why it was moving lower.
So what now? These names — you can throw iQiyi, Inc (NASDAQ:IQ) in there too, which rallied about 10% on Friday — are super volatile. They could rise or fall 5%, 10% or more on any given day for no reason at all.
I would personally wait for a pullback in HUYA, to either trend-line support (in blue) or the backside of downtrend resistance (in black). Whichever comes first. Its prior highs just under $32 may be support, too.
Top Stock Trades for Tomorrow #2: Spotify (SPOT)Spotify Technology SA (NYSE:SPOT) isn’t one we talk about too often, but the stock made new 52-week highs on Friday. The problem with names like SPOT, HUYA, IQ and others? They don’t have much of a trading history.
We don’t have many prior levels or trend-lines to work with, making them tough to trade.
With SPOT, aggressive traders can stay long so long as SPOT stays above $165. Conservative buyers may want to wait for a pullback to this level and buy for a more attractive risk/reward.
Below that and look for trend-line support to hold up. Below that and bears will be in control.
Top Stock Trades for Tomorrow #3: Stitch Fix (SFIX)Stitch Fix Inc (NASDAQ:SFIX) ripped higher on Friday, climbing more than 20% after the company beat on earnings and revenue estimates and boosted its full-year revenue outlook.
It’s got strong growth in active clients and is adding a new business segment to its operations. All of this should help fuel top-line growth. With a sub-$2.4 billion market cap, strong growth and profitability, it’s easy to be bullish on the name.
On the charts, there’s clear support near $19, but we’re a ways away from there. Instead, the next big level to focus on is $25. SFIX is not yet overbought, which gives bulls a chance to eclipse this level. If SFIX can do so and take a breather without falling back below $25, it may retest its prior highs near $30.
Top Stock Trades for Tomorrow #4: Advanced Micro (AMD)
Let’s end the week with a few updates, starting with Advanced Micro Devices, Inc. (NASDAQ:AMD). The stock got very overheated on some, albeit, great news.
However, shares had simply rallied too far, going from $9 in April to $16 earlier this week. For nimble bears, we said AMD is a short candidate — despite my disliking for shorting powerful stocks.
After tagging $16, we got a puke in AMD down to $14.25. Surely shorts didn’t hit the high and the low, but there was enough meat on the bone there for short-term bears. They’d be wise to have booked their gains by now.
If they haven’t, don’t let a winning trade go to a losing one based on stubbornness. No matter how hard you try to “will” a stock, the market will not care.
Top Stock Trades for Tomorrow #5: FedEx (FDX)
Let’s also update another recent trade: FedEx Corporation (NYSE:FDX).
A few days of trading into June and it felt like tech stocks needed a rest. However, transport and financial stocks were looking pretty good. That’s why we were buyers of FDX and Boeing Co (NYSE:BA), each of which were breaking out over resistance.
For once, FDX still looks good after hitting its head on $255 resistance. Now near $260, look for the $255 level to become support. This rally has been 10 weeks in the making, ever since FDX tumbled despite its solid earnings report in March.
In any regard, one more solid move higher could cement this breakout and should $255 hold as support, $275 becomes the upside target.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell was long BA and FDX.