4 Top Stock Trades for Monday: GOOGL, SPCE, RH, AAL

Here are the top stock trades we’re watching for Monday morning

Is the market finally running out of gas? While we saw new highs in the market on Friday, bulls struggled to keep the indices higher throughout the session. Let’s look at a few top stock trades going into the last few days of 2019.

Top Stock Trades for Tomorrow No. 1: Alphabet (GOOG)

Top Stock Trades for Tomorrow No. 1: Alphabet (GOOG)
Source: Chart courtesy of StockCharts.com

While Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and other mega-cap tech stocks explode higher, Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG) is missing a bit. Not so much in the sense that it hasn’t enjoyed 2019 — it has, up 30% — but in the sense that it hasn’t done nearly as well as its peers.

In any regard, GOOGL stock continues to coil just below $1,365. A breakout over the $1,367 high could kickstart a further rally, likely up toward $1,400.

Let’s see if the rising 20-day moving average can give GOOGL a boost, or if a pullback will be in order first. In the latter case, see that uptrend support (blue line) and the 50-day moving average buoy Alphabet.

Below that level puts $1,295 back in play.

Top Stock Trades for Tomorrow No. 2: American Airlines (AAL)

Top Stock Trades for Tomorrow No. 2: American Airlines (AAL)
Source: Chart courtesy of StockCharts.com

Oof. That’s all that can be said about American Airlines (NYSE:AAL) stock over the past few years. The stock continues to put in a series of lower highs, as sellers bully the price lower and lower.

On the plus side though, AAL stock put in a lower high in recent months. Shares are getting hit on Friday to the tune of 4%, so it’s not all good news. Still though, if American Airlines can put in another higher low — riding uptrend support (black line) higher — then bulls may get a breakout in 2020.

Should uptrend support fail, it puts $25.50 on the table, as well as downtrend support well below $24. Over downtrend resistance and the 50-week moving average, and AAL can garner some upside momentum.

Top Stock Trades for Tomorrow No. 3: Virgin Galactic (SPCE)

Top Stock Trades for Tomorrow No. 3: Virgin Galactic (SPCE)
Source: Chart courtesy of StockCharts.com

Virgin Galactic (NYSE:SPCE) officially came public about two months ago, but it has not received a very warm welcome. However, that’s starting to change.

After bottoming at $6.90 and finding its footing in the low-$7s, SPCE stock is looking better. Now consolidating between $10.50 and $11.50, traders are looking for a break of either level.

A breakout over resistance signals to bulls that more upside could be on the way, particularly if the stock can clear the post-IPO high of $12.09. A breakdown could send SPCE to its 200-day moving average. Should bulls fail to buoy it, sellers could knock it down to single digits.

Top Stock Trades for Tomorrow No. 4: RH (RH)

Top Stock Trades for Tomorrow No. 4: RH (RH)
Source: Chart courtesy of StockCharts.com

Formerly known as Restoration Hardware, RH Inc (NYSE:RH) has been on fire this year. Earnings are routinely better than -expected and a Warren Buffett investment has bulls feeling good.

That said, shares are slipping Friday, down more than 6% at one point. I would love to see bulls make a stand in this $210 area. There it has uptrend support (blue line), as well as the earnings gap-up level from earlier this month.

Below that and RH may need more time to digest this year’s gains. See if the 50-day moving average supports the stock in that case. If not, a retest of the $192.50 breakout area could be in order.

On the upside, bulls want to see RH reclaim the 20-day moving average, then take out the recent high at $229.55. If they can, it puts the prior high at $243.67 on the table.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long AAPL and GOOGL. 


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