Equity markets were relatively quiet on Monday, which is perhaps surprising given that crude oil prices rocketed higher. The commodity jumped more than 13% after a drone strike in Saudi Arabia over the weekend. Here are some top stock trades to watch this week.
Top Stock Trades for Tomorrow No. 1: Schlumberger (SLB)
Shares of Schlumberger (NYSE:SLB) are up over 5% on the day and could rally even further should demand for crude oil remain strong. On the charts, though, SLB stock is running into an important level.
$40 was support from February until May, when share prices broke down. In July, $40 was a tough level of resistance that forced SLB back to new lows. It has been a tough ride for shareholders.
However, with Monday’s gap up, shares are above the 200-day moving average. If they can reclaim $40, the 38.2% level near $43.50 is on the table. Above $44 and the 50% retracement is possible.
On the downside, see that SLB stays above prior downtrend resistance (the blue line).
Top Stock Trades for Tomorrow No. 2: Exxon Mobil (XOM)
Like SLB, Exxon Mobil (NYSE:XOM) isn’t getting quite the same boost that crude oil is, up “just” 1.6% near the close on Monday.
From here, bulls will want to make sure XOM stock stays above the 200-day moving average and the 61.8% retracement at $73.33. If it can, the 50% retracement near $76 is on the table, with the next upside target being June/July resistance at $77.
If support gives way, I want to see XOM hold up above prior downtrend resistance. Clearing downtrend resistance is a big setup for a lot of down-and-out energy names. Now it needs to stick.
Top Stock Trades for Tomorrow No. 3: Kirkland Lake Gold (KL)
After last week’s retreat, gold is on the move higher again. That’s giving a boost to Kirkland Lake Gold (NYSE:KL), which is up 4.3% on the day. However, that’s well off the highs near $45.
Shares are near a key point on the charts. Should KL close below $42, it will lose short-term support (black line) and uptrend support (blue line). That could open it up to a test of the 200-day moving average.
What bulls really need to see is for this support level to hold, and for KL stock to reclaim the 50-day moving average. If it can, it puts $50-plus on the table.
Top Stock Trades for Tomorrow No. 4: ServiceNow (NOW)
The setup in ServiceNow (NYSE:NOW) is pretty straightforward. Support at $250 held, as shares work on reclaiming the 20-day moving average.
If it does, it puts downtrend resistance (blue line) on the table, with a test of $270 as the next upside target above that. However, if the 20-day or downtrend resistance rejects NOW, see that $250 again holds as support.
If it fails, a test of the 200-day moving average is likely.
Top Stock Trades for Tomorrow No. 5: Dow
We’ve kept an eye on Dow (NYSE:DOW) thanks to that big dividend yield. However, more recently it’s been the bullish price action.
After bottoming out around $40 last month, shares have been quick to reclaim both the 20-day and 50-day moving averages. Further, Dow stock has also reclaimed the key $47 level. That puts $52 on the table now.
On a pullback, I would love to see the $47 level now act as support. However, the 50-day also attracted buyers on two consecutive pullback days (blue box) earlier this month. So that mark is the must-hold for now, in my view.