On Friday, we got the labor report for the month of June, and the 213,000 jobs came in ahead of expectations calling for 195,000. This sent U.S. equities higher, a sigh of relief among investors. That’s got us looking at five more top stock trades for Monday:
Top Stock Trades for Tomorrow #1: Biogen (BIIB)
Biogen (NASDAQ:BIIB) shares soared close to 20% on Friday over optimism for its Alzheimer’s treatment. It’s got BIIB stock running toward its 2018 highs, and it’s giving a lift to others in the sector, too (more on that in a minute).
As it stands, BIIB stock was rejected from ~$370, the same level it failed at in January. Should it push through, it’s a breakout investors will likely chase. As for an upside target, the backside of its prior trendline (blue line) could be one mark to note.
While it’s hard to imagine BIIB stock falling this far, investors would be wise to buy a pullback into the $300 to $320 range. This area has been both support and resistance in the past.
For now, we have to see how BIIB handles $370.
Top Stock Trades for Tomorrow #2: iQiyi (IQ)
News that Baidu (NASDAQ:BIDU) is paring back its position in iQiyi (NASDAQ:IQ) isn’t a surprise. Considering Baidu spun off IQ in an initial public offering (IPO) in the first place, investors shouldn’t be shocked it’s looking to reduce its near-80% position.
With IQ being the “Netflix of China,” this isn’t one we want to miss out on.
Investors who really want to own IQ can start nibbling. But I want to wait for IQ’s first test of the 50-day moving average. Luckily, the 61.8% Fibonacci line is near this area too, making it a solid risk/reward buy for bulls.
Should it break, a decline down to $24 is in the cards. However, I really like IQ and its long-term potential. Just be ready for some volatility.
Top Stock Trades for Tomorrow #3: AbbVie (ABBV)
AbbVie (NYSE:ABBV) was one of the many healthcare stocks that caught a boost on Friday. However, it needs to clear big-time resistance if investors want to see much more upside.
Support down near $87.50 is pretty clear, while downtrend resistance is currently near $100. The 50-day, 100-day and 200-day moving average are all between $99 and $102 too, which could act as resistance to ABBV stock.
The simple bottom line here? Near $97, we’re not buying ABBV. Shorts can use a close above trendline resistance as their stop-loss point, whereas bulls can buy on a breakout over this level.
Should ABBV pullback, look for support to hold up in the upper-$80s.
Top Stock Trades for Tomorrow #4: Twitter (TWTR)
We took a look at Twitter Inc (NYSE:TWTR) last week, as shares were consolidating the recent rally. Some investors weren’t too happy with the underperformance, but I think it’s a great way to work off that overbought condition.
The RSI (blue circle) is now back to normal levels, while TWTR stock is breaking out of its recent downward channel. Its highs near $48 are now back in target and a move to $50 doesn’t seem unreasonable.
As for short-term support, look for it to come into play on the top side of its recent downward channel.
Top Stock Trades for Tomorrow #5: General Motors (GM)
Man, nothing is ever easy when it comes to the stock of General Motors (NYSE:GM).
While the company has low growth, it trades at a dirt-cheap valuation and pays a dividend yield close to 4%. Further, its investment in Cruise Automation in 2016 valued the latter at about $1 billion. The latest investment from SoftBank (OTCMKTS:SFTBY) put its valuation closer to $11 billion, giving GM a huge and in many views an undervalued asset.
On its rally to $45, GM stock looked like it may finally be breaking out. Alas, shares have slid from $45 to sub-$39 in just a few weeks and are now currently finding support from the 100-day moving average.
Should GM stock fill its gap from May, it will require a decline down to $37.50. The move certainly isn’t out of the cards considering the tariff concerns and stock market pressures. It would put General Motors stock right near trendline support too and be a tempting buy for long-term bulls.
I don’t want to overcomplicate the chart, because there’s a lot of levels we could pay attention to in GM. To any semi-loyal readers, it’s clear I prefer simple setups over complicated ones. With GM, long-term investors can justify starting a position near current levels and adding to it on declines. Its got a good yield and reasonable valuation, and it’s making excellent strides in autonomous driving.
Bullish traders can look to buy on a decline toward $37 to $38 for a solid risk/reward buy. Further, let’s see how $40 treats GM should it rally from current levels rather than fall.
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.
