It was a mellow day on Wall Street, with stocks giving up just some of the gains from over the past few weeks. Overall though, bulls have to be satisfied with the way the market has held up since its post-Christmas lows. With earnings season just beginning, there are plenty of top stock trades to keep an eye on.
Top Stock Trades for Tomorrow #1: Citigroup
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Banks are the unofficial start to earnings season and this month, the sector led off with Citigroup (NYSE:C). Shares jumped 4% in response to the company’s earnings beat, despite missing on revenue expectations as sales decline 2.2% year-over-year (YoY).
The stock’s cheap but the action’s been ugly. It’s my opinion that the sector came under too much heat unless we’re heading for a recession, which doesn’t seem to be the case at the moment.
More than 20% off its lows right now and running right into the 50-day moving average, C stock is in a precarious spot. Bulls will want to see it push through the 50-day as well prior downtrend support to keep the rally going. Should C fail, they want to see the 21-day hold as support and at the very least, they cannot see Citi make new lows.
Above resistance and $66 is on the table.
Top Stock Trades for Tomorrow #2: Lululemon Athletica
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Shares of Lululemon Athletica (NASDAQ:LULU) saw a nice 5.5% bump on Monday after the company raised guidance. However, its gains were cut down dramatically from the session high. (Is it heading it $200 now?)
On the plus side, LULU has put in a couple of higher lows (purple arrows) since its December low. Further, the stock jumped over downtrend resistance (blue line).
However, after a quick rally through the $140 level, LULU stock is now having trouble with that mark. For the bulls to stay in control, the stock needs to stay above prior downtrend resistance and ideally see shares rally over $140.
Over $140 and $150 is on the table. Above $150 and the highs near $165 are possible. Below $135 (downtrend resistance) and that second higher low is on deck. That would be bearish to see LULU fall below it, especially after it updated guidance on Monday.
Top Stock Trades for Tomorrow #3: PG&E
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Shares of PG&E (NYSE:PCG) are plunging on Monday, down more than 50% after reports hit about the company’s plan to file for bankruptcy. Throwing around the “B-word” is obviously a big negative catalyst for a stock price.
It goes without saying, please don’t bottom fish this one. PCG is bad news and even if it doesn’t end up bankrupt, there are plenty of other better utility stocks to choose from. Or plenty of other stocks in general to choose from.
Avoid PG&E.
Top Stock Trades for Tomorrow #4: Nio
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Nio (NYSE:NIO) popped early on the day, but is struggling to hold onto its gains, up just 3.5% on the day. The stock pushed through its 21-day and 50-day moving averages as well as downtrend resistance before pulling back.
The stock is now only holding over the 21-day moving average. It would be bullish to see Nio stock push back through the 50-day moving average and downtrend resistance this week, giving it a shot to rally up to $8.
Should Monday’s rally fail to hold and Nio stock pulls back, look to see $6 hold as support.
Top Stock Trades for Tomorrow #5: New Age Beverages
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For those that were in that New Age Beverages (NASDAQ:NBEV) long trade from last week, it didn’t take long to get our big move. Shares are up 18% on Monday.
I am comfortable booking profits, but for those that want to let it run, let’s use a ~$7.00 stop-loss. Just don’t let this big winner turn into a loser.
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.
