A new round of tariffs sucked the wind out of the markets on Friday, but not enough to snowball any sort of large declines into the weekend. U.S. equities traded around flat on Friday, surprising given the decent rally we’ve had this week. Let’s look at our top stock trades.
Top Stock Trades for Monday #1: General Electric
Believe it or not, General Electric (NYSE:GE) is starting to look better! This $12.50 level was important and despite early selloffs on Thursday and Friday, GE was able to recover higher both days.
Thursday’s bounce off the lows put it back above $12.50, a key 2018 low that gave way not long ago. Then Friday’s bounce-and-rally put shares over downtrend resistance. It was an important move, as this stock has been struggling under this level for months.
In fact, shares have been struggling for a lot longer than that, too. The trade here is simple: Aggressive bulls can go long GE — crazy, I know! — and stop-out on a close below $12.50.
Top Stock Trades for Monday #2: Sears
Quite the opposite is true for the perennial loser that is Sears Holdings (NASDAQ:SHLD). Somehow this stock popped despite its dismal earnings, but this is not one to buy.
I have not once endorsed SHLD and it’s a good thing as shares have fallen precipitously. It’s end is a “when” not “if” scenario and I don’t want to take any gambles on an inconsistent mess like this.
If it loses it recent lows, it threatens to fall below $1 and delist. Above $1.50 and bulls may get some momentum up to $2. But it’s not a risk I’m willing to roll the dice on when so many better setups exist in this bull market.
Top Stock Trades for Monday #3: Kroger
Kroger (NYSE:KR) may have beat on earnings but it disappointed on revenue and guidance. Shares fell slightly as a result, but are backing into a low-risk support zone. The $27.50 area has been decent support for the stock over the past few years. That’s been the case this year especially, as that essentially marks the 2018 lows.
It helps that the 100-day moving average is right there at $27.72 and the 200-day moving average is at $27. KR shares could “overshoot” to the downside, but as long as the 200-day kicks in as support, Kroger looks good on the long side.
A close below the 200-day and bulls can walk away with relatively low losses. If it holds, a bounce back to ~$30 as target No. 1 could be in the cards.
Top Stock Trades for Monday #4: Apple
Shares of Apple (NASDAQ:AAPL) have been on fire lately and registered an RSI of almost 90 not that long ago (blue circle).
However, the stock cooled off into its big iPhone event earlier this week and has been choppy since. The products look great and consumers will love them. But will the market keep loving Apple stock? (Perhaps to $400?)
That will be easy to determine, given how close the 20-day moving average is to the current price. If the 20-day holds, a retest of the highs are likely coming. If the 20-day fails, look for a drop down to prior uptrend resistance (black line) and possibly the 50-day.
At least in the short-term, that will likely attract some buyers.
Top Stock Trades for Tomorrow #5: Etsy
You know what I love to say: KISS — Keep it simple, stupid.
Shares of Etsy (NASDAQ:ETSY) could easily run into resistance at $54 to $55 based on prior price action.
However, the move above $50 should not be ignored. I would love a “pullback” on Monday or Tuesday (or at least some consolidation) toward this level to see that it holds as support. If it does, Etsy is solid risk/reward buy with upside to the $54 to $55 level.
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.
