The Dow Jones Industrial Average jumped more than 1% while the Nasdaq Composite struggled to stay above breakeven on Friday, finishing 61 basis points higher, as markets head into a three-day weekend. (That’s right, don’t forget to keep your screens off on Monday, unless you just want to get in a little extra chart studying.) Speaking of which, here are the five top stocks to trades for when the markets reopen Tuesday:
Deere (DE)
Click to Enlarge
Now pulling back, we have to see where support comes into play. Short of Friday marking the short-term low, a test of the 50-day seems likely.
If we get a broader market correction — and perhaps some trade-war worries — we could get DE stock down into this $145 to $148 area. That puts uptrend support, and the 200-day moving average, into play.
That would give investors a low-risk long opportunity should they find DE attractive.
Nvidia (NVDA)
Click to Enlarge
With shares up just over 2% now, confidence isn’t all that high and the move isn’t all that impressive as NVDA fades off its highs. Bulls want to see to the stock stay over the 21-day moving average now. Below and the 50-day is on the table and possibly a test of uptrend support down below $140.
If the 21-day holds, a run up to $174 is possible. Above that and $200 becomes a possibility again.
Canopy Growth (CGC)
Click to Enlarge
So long as that’s the case, CGC can technically move higher. If it closes above $50, it could trigger a move up to the prior highs near $60. Below the 21-day moving average, though, and Canopy Growth stock may need some time to reset.
Applied Materials (AMAT)
Click to Enlarge
Despite a top and bottom line beat, AMAT stock pulled back after somewhat disappointing guidance. That said, shares are bouncing nicely off the 21-day moving average. Considering the run-up prior to earnings, this price action isn’t all that bad.
Aggressive bulls can buy now and use a close below the 21-day as their stop. Conservative bulls can buy on a potential breakout over the 200-day moving average.
Bears have a play too. If they didn’t like the quarter and don’t like the stock, they can consider shorting AMAT with a stop-loss on a close over the 200-day. More conservative bears can wait for a break of the 21-day.
If they get it, they can look to ride AMAT down to the 50-day moving average.
Newell (NWL) and XPO Logistics (XPO)
Click to Enlarge
In all, the report sent shares reeling, down more than 20% Friday. As such, NWL stock remains a no-touch. Its plunge below $18 thrusts it into no man’s land and puts the $15 lows on the table.
This one remains a disaster, just like XPO Logistics (NYSE:XPO), below.
A top and bottom line earnings miss sent XPO spiraling lower Friday, falling more than 12%.
While XPO is rallying off the lows, it’s in no man’s land, too. Like Newell, its 52-week lows are on the table of possibilities, and it’s hard to have much trust in this name until it can get above its 21- and 50-day moving averages.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long NVDA.
