A day after a big rally, stocks were under significant pressure on Friday. This is as Treasury yields threaten to invert and drag banks lower. It also ignites recession fears among investors. Let’s look at a few top stock trades to watching going into next week.
Top Stock Trades for Tomorrow #1: Bank of America
Bank stocks are under extreme pressure on Friday. Looking at Bank of America (NYSE:BAC), shares were down 5% at one point during the day. Now off less than 4%, bulls are stepping up to the plate a bit.
Still, this one was breaking out to the upside just the other day. Now we’re seeing range support give way. $28 was the floor in this name and now just a few pennies above $27, support has officially gave way.
Unless you’re a long-term investor, I would avoid BAC stock. At the very least, I’d give it a few days to see how it shakes out. I want to see if $28 will act as resistance or if BAC will fill the gap down to $26.50. It almost filled that gap on Friday, but didn’t quite get there.
If the gap doesn’t hold as support, look for the backside of prior downtrend support to buoy BAC.
Top Stock Trades for Tomorrow #2: Tiffany
The stock has been trending higher in a channel for several months and is now breaking out. But the $105 level could be tough to penetrate. For starters, this level was support turned resistance last fall, while potential downtrend resistance is near the area as well. Finally, the 50% retracement for the 52-week range sits just under $106.
That said, if TIF can push through this mark, it could trigger a large breakout. If so, see how it handles the 200-day. On a pullback, see if the prior channel resistance holds as support.
Top Stock Trades for Tomorrow #3: Papa John’s
Papa John’s (NASDAQ:PZZA) has added Shaquille O’Neal to its board and as a brand ambassador. This sent the stock higher by almost 6% on Friday. The move propelled PZZA over the 50-week moving average, while the momentum-measuring MACD (green circle) turns more in the bulls’ favor.
If momentum keeps up, see if PZZA can climb to $55. On a pullback, I want to see the 50-week and 10-week moving averages hold as support.
Top Stock Trades for Tomorrow #4: Canopy Growth
One could make the argument that Canopy Growth (NYSE:CGC) is still consolidating tightly between support and resistance. Loosely speaking, it is. But with Friday’s decline below the 20-day and 50-day moving averages and CGC is losing steam.
This group — and this name specifically — can be volatile. So I’m not saying that it won’t snap back on Monday and even breakout higher at some point next week. But at this rate, the name is simply lacking any follow through, meeting sellers each time it nears $48.
Even though we’ve been watching this one for weeks, it may be time for bullish traders to move on after Friday’s fall. The close below the 50-day is certainly a negative.
Top Stock Trades for Tomorrow #5: Nike
If the stock doesn’t reclaim the 50-day early next week, Nike may have lower to go. If it does reclaim this mark, look for $83 and the 50-day to support the stock. Otherwise, let’s see if we can’t nab NKE stock on a decline down to the 200-day. That would be a great dip-buying opportunity.