Stocks churned out surprisingly strong gains on Monday, just a day ahead of the midterm elections, which are sure to move markets later this week. Here are our top stock trades as we move into what is sure to be an interesting week.
Top Stock Trades for Tomorrow #1: PepsiCo
Shares of PepsiCo (NYSE:PEP) look like they’re ready to breakout Monday. Safe “blue-chip” stocks like PEP, Procter & Gamble (NYSE:PG), Johnson & Johnson (NYSE:JNJ) and others have caught a healthy bid as market volatility remains elevated.
This one is simple.
Over downtrend resistance and investors can stay long PEP. Short-term traders can use a close below the 50- and 100-day moving averages as their stop-loss.
Top Stock Trades for Tomorrow #2: Activision Blizzard
Activision Blizzard (NASDAQ:ATVI) has been ugly, tumbling about $20 a share over the last five weeks. The 24% decline has landed the stock near $64, a level of support throughout 2018.
Its recent low also comes into play on an uptrend line used sparingly over the last 18 months. A close below the October low is a good stop-loss, making ATVI an attractive candidate from a risk/reward setup. If ATVI can get over $66, look for it to test some of its key moving averages in the low-$70s.
Top Stock Trades for Tomorrow #3: Match Group
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Failing at the $54 level on Friday marked another successful hold of resistance on Match Group (NASDAQ:MTCH). Shares are now below the 50-day and 21-day moving averages.
The play now is simple. Wait for a pullback to the mid-$40s, where Match will find channel support, level support at $44 and the 200-day at $44.65.
Top Stock Trades for Tomorrow #4: Ventas Group
Last week we pointed out the strength in Realty Income (NYSE:O), a consistent blue-chip REIT. Now we’re highlighting the strength in Ventas (NYSE:VTR). I should also mention that we liked these names quite a bit in early summer, so some investors may still be long.
The stock is bumping into overhead resistance, but look resilient. The yield is good — over 5.5% — and the fundamentals are strong. Yes, a rate hike is likely coming in December and just as it did in September, VTR may suffer a quick decline.
Maybe that decline will knock it down to the backside of downtrend resistance and the $58 level. That is, if VTR can breakout above it. If it can, a run into the low- to mid-$60s could be in the cards.
Top Stock Trades for Tomorrow #5: Sogou
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Chinese stocks have started to make some noise, Sogou (NYSE:SOGO) included. Shares started off deep in the red, but reversed higher on the day. That’s good price action for the bulls.
The reversal was even more critical because it launched the stock over downtrend resistance and the 21-day moving average. The 50-day will likely be resistance on the first test, but if and when it gives way, look for a run up to $8. That’s the real line in the sand.
On the downside, bulls can cut ties with their long position below $6.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell O and VTR.
