It was a sluggish day in the stock market on Friday, as investors gear up for a non-farm payrolls report on Friday and digest a rocky start to December. Let’s look at a few top stock trades.
Top Stock Trades for Tomorrow No. 1: RH Inc (RH)
Man, what a blowout quarter it was for RH (NYSE:RH), formerly known as Restoration Hardware. The quarterly figures sent shares to new all-time highs, while the stock is working on its seventh straight monthly gain.
After a double-digit one-day move, it’s likely a bit late to start chasing the name now, but keep an eye on it going forward.
On a pullback, see if prior channel resistance (blue line) acts as support. Depending how it trades, the 20-day moving average may also represent a solid buying opportunity. This recent Warren Buffett buy is certainly a buy-the-dips candidates given how well it has moved this year.
Top Stock Trades for Tomorrow No. 2: Dollar General (DG)
Dollar General (NYSE:DG) is working on slight gains after reporting earnings on Thursday. For now, the stock is giving investors a very measured level of risk.
Simply put, DG is holding up at its prior gap-up level, the 100-day moving average and the backside of prior downtrend resistance (blue line). A break below this area — call it $150 — and DG could go on to fill its gap in the lower-$140s, technically speaking.
If this area holds as support, look for a rebound up to the 50-day moving average. Above that and resistance near $162.50 may be on the table. Above that and the 52-week high of $166.98 is possible.
Top Stock Trades for Tomorrow No. 3: Kroger (KR)
Unlike DG, Kroger (NYSE:KR) is struggling after reporting its quarterly results. However, not all hope is lost with Thursday’s decline.
If Kroger stock can hold up over $26.50 — essentially, the September high and recent support — then reclaiming the 20-day moving average is possible. Should it rebound further, see if KR can hurdle $28 and break out to the upside.
If Kroger can’t hold $26.50, then we need to consider some downside targets. First is the 50-day moving average and uptrend support (blue line). If it goes below that, $25.50 is possible.
Top Stock Trades for Tomorrow No. 4: Biogen (BIIB)
Man, Biogen (NASDAQ:BIIB) has been a wild mover since October. But guess what? The stock has been in an amazing trading range — one that saw its highs and lows tested on Thursday.
One could certainly make the case that this is a “go with” trade on a break of either range support or resistance. That is, buying the breakout over resistance or selling the break below support.
For traders that do take the trade though, be vigilant. This one is a wild mover with plenty of volatility.
Top Stock Trades for Tomorrow No. 5: Signet Jewelers (SIG)
Signet Jewelers (NYSE:SIG) ripped higher by more than 6% on Thursday, but resistance kept it in check.
That came from both the $18 level and the declining 200-day moving average. Fortunately though, the setup is now pretty straightforward.
A move over the 200-day triggers a long entry. The first upside target is Thursday’s high. Above that and $21 is possible. Below $18, and support between $16 and $17 may be called upon. There it has the 20-day and 50-day moving averages, as well as uptrend support.
Dip-buyers may feel comfortable nibbling on a decline into this area, but below uptrend support could send SIG stock to $15 or lower.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities.
