With the G20 summit right around the corner, stocks were relatively muted on Monday. Investors are trying to position themselves ahead of earnings next month, the Fed’s looming rate cut and trade headlines leading up and following the G20 summit. Let’s look at some top stock trades from Monday.
Top Stock Trades for Tomorrow #1: Bristol-Myers Squibb
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Shares of Bristol-Myers Squibb (NYSE:BMY) took a spill, falling over 7% on Monday. The fall comes after two pieces of news. With the company looking to wrap up its acquisition of Celgene (NASDAQ:CELG), the duo are apparently willing to divest Celgene’s Otezla unit.
That unit represented about 10% of Celgene’s most recent quarter of sales and is a $1-billion-a-year drug. Investors obviously aren’t too happy about that. Negative news about BMY’s Opdivo isn’t helping sentiment either.
So what now?
The charts were just starting to look good for BMY, with the stock trying to climb north of $50 for the time since March. Instead, investors are now hoping that support in the $44 to $45 area holds up.
Top Stock Trades for Tomorrow #2: Celgene
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It also bring up the question of Celgene. Shareholders are to receive $50 in cash plus 1 share of BMY for each share of CELG that they own. Currently, that puts the deal value at $95 for Celgene stock, not including the cash incentive to shareholders for future drug approvals.
However, because the deal is not expected to go through until Q4 2019 or Q1 2020 — unlike previously expected in in Q3 2019 — both stocks are still susceptible to big moves.
Below the 20-day and 50-day moving averages is not all that great for Celgene stock. However, still north of $92.50 means CELG is okay, technically speaking.
Top Stock Trades for Tomorrow #3: Caesars Entertainment
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Shares of Caesars Entertainment (NASDAQ:CZR) are surging on Monday, up almost 15% on a $17.3 billion merger agreement with Eldorado Resorts (NASDAQ:ERI), which is down about 15% as a result.
With the exception of the size, the deal is somewhat similar to the BMY-CELG one above. Assuming regulatory approval, CZR stock could drift higher. At the time of the news release, it valued CZR stock at $12.75 apiece, more than $1 per share below current levels.
That said, CZR’s final value will depend on the value of ERI too. I want to see CZR stay north of the 200-day moving average. I also want to see ERI stock stabilize as well.
Top Stock Trades for Tomorrow #4: New Relic
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New Relic (NASDAQ:NEWR) is a new one for the Top Stocks list, but its action warrants some attention.
$95 has been pretty solid support, as has the 200-day moving average. With Monday’s fall though, both levels gave way. Bears may be tempted to short NEWR on a retest of this area provided it now acts as resistance.
With support failing, a drop down to the $77.50 to $80 area is possible. Until it’s north of $95 again, bulls may need to wait for a better opportunity.
Top Stock Trades for Tomorrow #5: Match Group
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Match Group (NASDAQ:MTCH) caught a big bounce on Monday, with shares jumping more than 7%.
The move comes on a test of the 50-day moving average, which has buoyed the name for months now. Over $74 and MTCH stock can breakout out. If it acts as resistance again, look to see if the 50-day holds once more.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long CELG.
