A less-than-stellar jobs reports caused stocks to take a breather on Friday. Let’s take a look at a few top stock trades for next week:
Top Stock Trades for Tomorrow #1: Disney (DIS)
While the broader market continues to churn its way to new highs, Disney (NYSE:DIS) stock is not whistling the same tune. To be fair, the stock is still up big, but after peaking in late-November, it’s been unable to garner much upside action.
It sits on key support, as investors wonder whether this will give DIS a much-needed boost or if it will fail and trigger more declines.
The stock was trading in a descending triangle pattern, as downtrend resistance (blue line) squeezed shares lower against a static level of support (black line). However, rather than break down — which DIS almost did — shares broke out over downtrend resistance.
Almost right away though, shares were back under pressure, selling back down to $144.50. Now sitting near short-term support, the backside of prior downtrend support and the 50-day moving average, this is make-or-break territory in the short term.
On a bounce, see if DIS can take out its recent high at $148. If support fails, a test of the 200-day may be in order.
Six Flags (SIX)
Six Flags (NYSE:SIX) was decimated on Friday after warning on revenue. Shares blew through downtrend support (blue line) and right through the $40 mark, which has been a notable level over the past five years.
Now just under $36, SIX is definitely in no man’s land.
If it continues lower, look to see if the $32.50 to $33 area buoys the name. If it begins to rally, see if the stock can reclaim prior downtrend support, then $40.
In the event that we see more selling next week, either ahead of or after earnings, this one may be a solid buy-the-dip candidate. Specifically, I’m looking for a pullback to the $76 area, which was a big multi-year breakout level.
Even though that would put it below uptrend support (blue line) and the 10-week moving average, that level would represent a good spot to nibble a long position — provided its earnings results are not dramatically worse than expected.
Below that, and the $70 to $72 area may be a good spot to buy as well. Over last week’s high of $81.26 and C can keep on running.
It could not penetrate the $11.20 level and is being sold into the close. From here, bulls will want to see the $10.40 to $10.50 level hold as support. The former has been significant over the past year, while the latter marks the 200-day moving average.
On a rebound, see if INFY can take out $11.20.