After a big rally on Thursday, stocks again added to their gains on Friday on optimism over global trade resolutions between the U.S. and China by year’s end. Even before that news came out though, there were plenty of big movers. Here are our top stock trades for Monday.
Top Stock Trades for Monday #1: Tesla
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Shares are tumbling 8% in response and are entering a critical area of support.
Bulls couldn’t keep Tesla over $360 or its go-private rally day (arrow). After seeing uptrend support fail (purple line) on Friday, the $300 to $310 range is now of critical importance. A break below that mark and there’s no clear sign where TSLA will bottom.
One could argue that the $280 to $290 range may have support, but nothing as strong as some of the levels it’s cutting through or into as we speak.
Below that range though and the April lows are back on the table.
Top Stock Trades for Monday #2: Nvidia
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Now this company did report earnings. With crypto revenues falling off a cliff and guidance coming up a bit short, shares of Nvidia (NASDAQ:NVDA) were declining Friday.
So is this story over? Of course not. At least, not in the long-term sense. Crypto is a very small portion of revenue for NVDA, while its core businesses remain incredibly hot. Let’s not forget, Nvidia did beat earnings and revenue expectations.
Short-term traders may find better luck in other names, but long-term investors shouldn’t give up on Nvidia.
Shares are clearly stalling over $250 and without that added “oomph” of crushing earnings, Nvidia may need to digest its large, multi-year move for a little while longer.
Those fine with waiting can consider buying in stages. Perhaps some in the low-$240s and another add at the 200-day. If we get down to the $215 to $220-ish area, that is another level of support, as is $200. These buying opportunities may largely depend on how tech trades going forward.
Top Stock Trades for Monday #3: Nordstrom
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It broke JWN out of its 2018 trading range (purple lines) and is challenging trend-resistance from its highs this year (blue line).
Ironically, the move over $56 put JWN over a big level, both from a resistance-level perspective and a trading channel perspective. At $58 though, there are multiple prior-high levels to fight through.
So what’s the trade? A pullback and hold of $56 would be attractive. That or a move over $58.
Top Stock Trades for Tomorrow #4: Applied Materials
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Shares have been trading poorly for a while though, particularly after topping out in March. After bouncing off its $42.50 lows, AMAT is clinging to support near $45.
If it fails, the bottom of its recent channel is in play, near $40.
I wouldn’t be interested in AMAT until it can breakout over channel resistance, now near $47.
Top Stock Trades for Monday #5: S&P 500 ETF
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From a trading perspective, it looks pretty good. After a spill earlier in the week, the S&P 500 ETF (NYSEARCA:SPY) is holding up over $285 and roughly $278. Bears make a lot of fuss, but with the economy doing well and earnings coming in strong, I am not going to turn bearish until the charts tell me to.
At this point, near all-time highs, I don’t see the reason to flip. While $285 may turn into resistance, we’ll have to see how the $278 to $280 area does as support. The same can be said for uptrend support and the 50-day moving average.
Below these marks and we can turn more cautious. But for now, it’s paid to stay bullish when the charts have told us. Hat tip to Anthony Maceroni.
He’s a great follow on Twitter and posted the weekly SPY setup before this article.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Kenwell is long NVDA.
