It was a quiet trading session on Friday, with U.S. stocks rising modestly ahead of a three-day holiday weekend. Will we see more selling pressure next week or will positive trade talk give stocks a lift? When one tweet can move the market, it’s impossible to say. So let’s look at a few top stock trades out there.
Top Stock Trades for Tomorrow No. 1: Roku
We’ve been pounding the table on Roku, calling it a buy in Q4 and Q1. Now it’s almost up to $100 a share. Should you get long now?
No. Shares are up more than 70% in about five weeks. It has almost quadrupled from its December lows (not that it deserved to be that low in the first place). But the point is still the same: you’ve missed the boat.
I love ROKU over the long term, but to think that we won’t see sub-$95 prices again is absurd. With the stock overbought in the short-term and coming into possible resistance, hedging and/or taking some profits doesn’t seem like a bad idea at this point … at least until lower prices come around.
Top Stock Trades for Tomorrow No. 2: Splunk
Aggressive bulls who feel compelled to go long SPLK stock can do so against Friday’s low.
I would love a lower open near the 200-day on Tuesday that quickly reclaims Friday’s close and goes green. Preferably, SPLK would also reclaim the 50% retracement at $120.78 in the process.
If it falls under Friday’s low, SPLK can go even lower. On a rally, we need to see if it can climb back to Friday’s highs near $130, and/or the 20-day and 50-day moving averages.
Top Stock Trades for Tomorrow No. 3: Autodesk
Below $155.56 — the 38.2% retracement — aggressive bulls who are getting long on Friday’s decline may want to consider stepping out. It would put ADSK below several key support levels and suggest that sellers have not yet exhausted themselves. In that case, look for a possible test of the 200-day.
Reclaiming the 50-day would repair some of the damage, but beware that this level may act as resistance. That would give short-sellers an entry, with a retest of the $158 area in mind.
Top Stock Trades for Tomorrow No. 4: Novartis
The move has NVS hitting new highs in Friday’s session. The stock has been largely limited by channel resistance and buoyed by channel support. As it hits channel resistance, we’ll have to watch to see if NVS will break out to a new range, or be limited in upside as a result.
As long as $84.50 to $85 holds as support, NVS looks good to buy on the dips.