A dismal jobs number on Friday morning only added pain to the S&P 500, which has somewhat quietly fallen for five straight sessions. Investors are now wondering if the index is set to bounce or whether more downside is in store. As that plays out, we need to keep our top stock trades in focus.
For a breakdown of the S&P 500, check out yesterday’s segment.
Top Stock Trades for Tomorrow #1: Okta
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Okta (NASDAQ:OKTA) initially fell by 8% after reporting earnings. However, it didn’t take long for investors to rally the stock back up over $75. In fact, right after the report I said it a rally back over $75 wouldn’t be surprising.
That was due to the company’s strong earnings report and guidance, with only its earnings per share outlook disappointing the Street.
With that said, we were hoping to get a pullback in this growth giant down to the $67 to $68 to area. That was a prior support area, while Fibonacci support is down in this area too. It didn’t get there, with $70 and the 100-day propelling OKTA higher.
Back up over the 50-day and through $80 would make it safe for bulls once again. Below the 50-day puts Friday’s low back on the table.
Top Stock Trades for Tomorrow #2: Big Lots
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Better-than-expected earnings launched Big Lots (NYSE:BIG) higher by 14.5% on Friday. Shares opened at the 100-day, briefly dipped below it, then took off running.
The stock isn’t closing at its session highs, But a run up to the 200-day and possibly $40 certainly looks possible. With an elevated RSI and the significance of $40 as a prior support level, I’d expect this level to act as resistance on the first test.
Bulls can stay long with BIG over the 100-day.
Top Stock Trades for Tomorrow #3: Tesla
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Shares of Tesla (NASDAQ:TSLA) remain volatile — what else is new? — as the headlines just keep on coming. Bulls have to like that the stock has stood up to the $270 test and is now moving higher.
However, below $290 is discouraging and downtrend resistance is very clear. If this name can clear $315, the bulls will be firmly back in charge. A failure to clear this level upon retesting its major moving averages and downtrend resistance mean bears are still in control, but not dominating the name.
Top Stock Trades for Tomorrow #4: Nvidia
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Is Nvidia (NASDAQ:NVDA) becoming range bound between $130 and $160? It’s starting to look that way, although it is technically putting together a string of higher lows as well.
Bouncing on the 50-day is encouraging this Friday, but should it take out this low next week, I’d expect a decline down to $140. From there, look for a bounce off uptrend support. If it fails, the $130 range lows are on deck. Below and NVDA could be in trouble.
Top Stock Trades for Tomorrow #5: Upland Software
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Upland Software (NASDAQ:UPLD) isn’t the biggest company around, but after its top- and bottom-line beat and 17% rally on Friday, the stock could soon be knocking on the door of the $1 billion market cap club.
Over $37 and this move is officially a breakout to new highs. The question is, can it stick?
I don’t really want to go long at Friday’s highs and use a stop-loss at the lows, as it leaves me open to a potential loss of 6.8%. However, dabbling in a name like UPLD and we could have a worse risk/reward than that.
Let’s see what the stock does Monday or within the first few days of the week. If we get a slightly down open that quickly goes green, it gives bulls a quick long trade with an attractive risk/reward. If we get a 1- to 3-day pullback, it could setup buyers with an attractive entry using Friday’s low as their stop-loss.
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.
