Markets were hit hard in early Monday trading, as trade tensions spooked investors. Let’s look at a few top stock trades as we enter the last trading month of 2019.
Top Stock Trades for Tomorrow No. 1: Roku (ROKU)
Roku (NASDAQ:ROKU) was down around 7% in pre-market trading thanks to a negative analyst note from Morgan Stanley. At 8 a.m. ET, not many were expecting the stock to be down 17% a few hours later.
But that’s exactly what we had, before shares erased some of those gains. While Roku was hammered on a day where the rest of the market was under pressure too, a 17% beating is not really a fair response given that nothing actually changed with the company.
So how do we trade it?
The decline all but solidified $170 as resistance, but support came into play where it needed to. The 50-day moving average is near $132, while the 100-day is at $130. Not many expected Roku to go from $160 to $132-and-change in one day, but with Monday’s bounce, support is doing its job.
Below $130, though, the $116 to $120 area could be in the cards. Otherwise, let’s see if Roku can fill some of this gap.
Top Stock Trades for Tomorrow No. 2: Gogo (GOGO)
On tough market days, I love to look for the stocks showing relative strength. Unlike many in the market, Gogo (NASDAQ:GOGO) was positive throughout the session.
On Friday, the 200-day moving average held as support, along with channel support (blue line). On Monday, the stock reclaimed the 100-day moving average. Now, bulls need to see the stock hold the $5.25 level and continue higher.
If it does, look to see if Gogo can reclaim the 50-day moving average. Above puts $6-plus on the table and a possible retest of channel resistance. If it doesn’t, $5 is back on the table.
Top Stock Trades for Tomorrow No. 3: Bank of America (BAC)
Like Gogo, Bank of America (NYSE:BAC) also displayed relative strength on Monday. In fact, BofA hit a new 52-week high.
I have been waiting — AKA hoping — for a pullback in BAC stock, as its Q4 breakout has been very impressive. The stock continues to do an excellent job holding onto its recent gains, something many traders have surely noticed.
$33 was resistance last week, but holding above it now puts $34-plus on the table. If it falls below $33, let’s see if uptrend support and the 20-day moving average can buoy the name.
If not, see if buyers step in around $32. Dropping below there could put the 50-day moving average on watch. If we get a real correction in the market, a retest of $30.50 to $31 would be attractive in BAC.
Top Stock Trades for Tomorrow No. 4: Bristol-Myers Squibb (BMY)
Not to beat the relative-strength theme to death, but Bristol-Myers Squibb (NYSE:BMY) was also on display Monday. Channel support (blue line) held throughout last week, and shares are now trying to push through $58.
From here, the setup is straightforward. Either BMY reclaims $58 or it doesn’t.
If it does, it puts the 52-week high of $59.17 on the table, with channel resistance being the upside target above that. If Bristol-Myers can’t reclaim $58, then channel support will again be called on. Should it fail, see if buyers step in near $55 again, while the 50-day moving average should act as support as well.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long GOGO and ROKU.
