Stocks are under pressure on Friday, falling as coronavirus worries continue to weigh on equities and drive up safe-haven plays. That said, here’s a look at some top stock trades for next week.
Top Stock Trades for Tomorrow No. 1: Slack (WORK)
Slack (NYSE:WORK) is up more than 2% on the day, despite jumping more than 6% in pre-market trading on reports that Uber (NYSE:UBER) will move all of its employees onto the platform. WORK has had momentum after similar reports of IBM (NYSE:IBM) doing the same thing earlier this month.
Slack’s rally drew in sellers on Friday, but the stock is still looking better overall. Earlier this month, Slack broke out over the 100-day moving average, then held this mark as support on a pullback.
A few days later, it pushed above the $26 IPO price. Now, investors want to see it hold up above the $26 to $27 area. Above keeps Friday’s high of day and $30-plus on the table.
Below this area and the 20-day moving average, though, and the 50-day and 100-day moving averages are on the table, with both near $23.
Top Stock Trades for Tomorrow No. 2: Gold ETF (GLD)
The SPDR Gold Trust ETF (NYSEARCA:GLD) remains red hot, as investors continue the flight-to-safety trade even as equities have done well the last few months.
With Friday’s gap up, the GLD is hitting new 52-week highs, while sporting an overbought condition on the relative strength index (RSI). The move caps six straight sessions with a gain, as GLD broke out over $150 this week.
Just because shares are overbought, doesn’t mean the stock can’t run higher possibly to $160. However, investors may prefer to wait for a dip. Preferably, a drop down to the $150 breakout mark will be met with support — a strong sign that bulls are still in control.
It would also be attractive to see the 20-day moving average hold as support. Below both measures puts the 50-day moving average on the table.
Top Stock Trades for Tomorrow No. 3: Deere (DE)
Shares of Deere (NYSE:DE) are hitting new annual highs on Friday, after surprisingly better-than-expected quarterly results. The stock is pushing through recent resistance near $177, but struggling to hold its gains above this mark.
Above resistance puts a move up to $185-plus on the table. However, failure to close over resistance keeps downside levels in the realm of possibilities too.
That would first put the 10-week moving average on the table near $172, followed by a slightly deeper dip down to the $161 to $163 area. There, Deere will find the 50-week moving average and uptrend support (blue line).
After such a favorable reaction to earnings, I wouldn’t normally look for such a pullback. But when considering current resistance along with the possibility of a larger market correction, these downside marks become possible.
Overall, just stay open-minded and flexible. Let price be the guide, not opinion.
Top Stock Trades for Tomorrow No. 4: Dropbox (DBX)
Bucking the trend on Friday is Dropbox (NASDAQ:DBX), which is up 23% at one point after reporting earnings.
The charts for this one are really interesting. With the move, shares are ripping through the 20-week moving average — which roughly translates to the 100-day moving average. This measure has been resistance for several months now, stymieing each rally in DBX stock.
Furthermore, the stock burst through the 50-week moving average and long-term downtrend resistance (blue line). One measure many investors are surely not considering is the newly established 100-week moving average, which just came into play at $23.76. Guess what Friday’s high is so far? DBX came within 4 cents of that mark.
On the upside, the 100-week moving average is now the mark to clear for more upside. If it can, $26 is on the table. On the downside, though, see that $20 to $21 holds as support. $21 is the IPO price for Dropbox, while this area also marks the 50-week moving average and backside of prior downtrend resistance.
The chart for DBX is my favorite from this week, purely from a technical perspective. However, that doesn’t mean it’s the best buy or anything like that. Just pure technicals that make it a fun one to study.