With the Fourth of July holiday quickly approaching, many traders are hitting the road and taking a few days away from the screens. For those who aren’t, here’s a look at a few top stock trades to watch next week.
Top Stock Trades for Tomorrow #1: Nike (NKE)
What a turnaround Nike (NYSE:NKE) has shown over the last year. Shares are exploding Friday, up more than 10% after better-than-expected earnings results. No surprise here.
Anyway, I would have salivated at the chance to chomp into NKE stock on a pullback into the $68 to $70 level. Now up to $80, we have to see how it trades. My guess? Pending a market-wide reversal, Nike will consolidate and continue higher.
But like I said, it’s just a guess for a reason and right now we don’t have enough conviction to buy or sell. Let’s put NKE on the go-to list and see how it trades going forward.
Know though that if we get a big summer swoon, Nike is one to buy in the $68 to $70 area.
Top Stock Trades for Tomorrow #2: Constellation Brands (STZ)
Constellation Brands, Inc. (NYSE:STZ) is a great company, but it couldn’t maintain the insane rate of growth it had been putting up year after year. A high valuation is starting to catch up with those slowing rates of growth and missing on quarterly earnings isn’t helping its case.
Still, STZ stock showed a strong bounce off its $215 lows, the same lows that STZ made in May.
Now back over the 200-day moving average, aggressive bulls can take a stab at the name and use that level as their stop-loss. I’d rather give STZ a few more trading sessions and see how it trades in the beginning of the third quarter to get a feel for where it’s heading.
While it’s a bit extreme, I would much rather gobble up STZ down near $204 though, just like buying Nike on an extended decline.
Top Stock Trades for Tomorrow #3: JPMorgan Chase (JPM)
JPMorgan Chase & Co (NYSE:JPM) saw a quick pop on Friday, but those gains evaporated toward the close. It still seems like the bank stocks simply can’t catch much of a bid.
That’s despite JPMorgan giving a significant boost to its capital return plans, bumping its quarterly dividend to 80 cents from 56 cents, an increase of 42%. Additionally, it can purchase up to almost $21 billion worth of common stock with its buyback.
Unfortunately, after initially rallying over $106 per shares, JPM was unable to close above this mark. This area was a big level of support in 2018, but as they say, the more times a level is tested, the more likely it is to break.
That’s what we’re seeing with JPM and if it can’t get back above this mark, it could turn to resistance. The looming downtrend of resistance doesn’t help matters.
Could we chalk this up to the opposite of window dressing, with fund managers not wanting to have a lot of JPM on their books for their end-of-quarter marks? Perhaps. But with a low valuation, solid growth, a big buyback and now a dividend yield of 3%, it’s hard to ignore JPM stock. Let’s see if it can get back above $106 though.
Top Stock Trades for Tomorrow #4: Bank of America (BAC)
Like JPMorgan, Bank of America Corp (NYSE:BAC) couldn’t hold onto its initial gains either. It popped higher in the morning, running into previous support and failing to break through.
While its capital return bump wasn’t as significant, there are still a lot of reasons to like BAC. Higher interest rates improve its profitability, while solid growth and a low valuation continue to make Bank of America a solid stock to hold.
With virtually the same setup as JPM though, we need to wait for BAC to get back above $29 before going long.
Top Stock Trades for Tomorrow #5: Intel (INTC)
Intel Corporation (NASDAQ:INTC) has been struggling but bounced back on Friday. Can it last? Perhaps so, but if not, we need to know where INTC could be heading.
After INTC broke below key trend-line support, it was clear shares could be in trouble. The resignation of CEO Brian Krzanich didn’t help matters.
I would watch the $46 to $47 area, where the 200-day moving average and previous support could come into play. If it holds up, INTC is a solid risk/reward buy. Below though and the $42 to $43 area is likely on the table.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not have a position in any aforementioned securities.
