The market’s bullish backdrop demands I throw out a few my favorite stocks to trade. These guys offer some of the best stock charts available and boast trends that point to more upside.
Last Friday’s price action is all you need to know about market sentiment right now. Equities gapped lower amid weak economic data from China and a poor employment report here in the U.S. And yet, the lower open was bought, and stock tread quietly higher all day long. The bullish reversal ended a week that gifted traders with a clear buy the dip opportunity.
And if this morning’s green open is any indication, bulls are already on the move. Today’s picks all provide low-risk entries in uptrends that should have staying power.
Behold, 3 of the best stocks to trade for the week.
3 of the Best Stocks to Trade: Electronic Arts (EA)
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The price action in Electronic Arts (NYSE:EA) has been incredibly volatile this year, but that hasn’t prevented a bullish trend from forming. Aided by the debut of its insanely popular new Battle Royale game, Apex Legends, EA stock has gained 25% and boasts a rising 20-day and 50-day moving average.
Since rocketing higher on news that Apex Legends was a hit, EA has since settled into a narrow trading range which makes it easy to identify clear price thresholds to trade around.
$100 is the current ceiling keeping a lid on the stock. Once it breaks, however, a quick run to $110 could be in the cards. Consider selling the April $90/$85 bull put spread for around 80 cents if we get a pop above $100.
Boeing (BA)
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Boeing (NYSE:BA) may be the surprise inclusion to today’s gallery in light of the fallout after the horrific plane crash over the weekend, but hear me out. First, this morning’s gap lower carried the aerospace juggernaut directly into a handful of potential support zones, including a gap fill area from January’s earnings release, and a cluster of old resistance pivots that formed the top of its yearlong trading range.
Second, rather than embrace the new lower prices, buyers swiftly emerged to gobble up the fire sale. This morning’s rapid upside reversal proves Boeing bulls are still in control and view the overnight plunge as an event to be bought, not sold.
Volatility will likely persist for a spell, but if you are willing to bet the downside is minimal at this point, then sell the Apr $360/$350 bull put spreads for $1.85. Premiums are pumped, and you’re receiving far more reward than usual.
Microsoft (MSFT)
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Microsoft (NASDAQ:MSFT) shares have toed the bullish line this year and last week’s pullback was no exception. Rather than suffer a deep retracement, the selling in MSFT stock was minimal. Buyers emerged right on time to defend the rising 20-day moving average and create a strong upside reversal candle to carry the software giant into the weekend.
With the Nasdaq surging this morning we’re seeing continued momentum, and MSFT is now testing overhead resistance. I think a break of the $113 ceiling is inevitable and the stock will soon test its all-time high of $116.18.
Implied volatility is scraping the lower end of its yearlong trading range, and that makes option buys a cheap play. Buy the May $110 call for $5.90
As of this writing, Tyler Craig didn’t hold a position in any of the aforementioned securities. Check out his recently released Bear Market Survival Guide to learn how to defend your portfolio against market volatility.
