What started off as a quiet day slowly turned into the bulls’ favor on Monday. With that in mind, let’s look at a few top stock trades after a solid day of trading.
Top Stock Trades for Tomorrow No. 1: Nvidia (NVDA)
The trend in Nvidia (NASDAQ:NVDA) has been incredible, particularly given the size of this company. Shares are up about 114% from the March low, which is no joke for a $251 billion market capitalization stock.
Despite the large run, shares look poised for more upside as they continue to grind up on the 20-day and 10-day moving averages. This latest run to new highs and gentle pullback on reduced volume is the quintessential bullish price action I love to look for.
Now keep an eye out for a week-up rotation back over last week’s high at $431.69. Above that technically puts $450 in play, which is just ahead of the two-times range extension at $451.58.
A rotation below last week’s low at $391.42 would put shares below the 10-day and 20-day moving averages, and put the 50-day moving average in play. Below that and the $340 to $350 area could be on the table.
Top Stock Trades for Tomorrow No. 2: Twilio (TWLO)
Twilio (NYSE:TWLO) has been a beast ever since gapping higher in May on better-than-expected earnings.
Look at the way shares broke through $210 in mid-June and then used that former level of resistance as support. It continues to ride the 20-day moving average higher, albeit while flirting with moves below it.
With shares ripping over the prior all-time highs, we must turn our attention to potential upside levels. The main one that commands my attention is the 261.8% extension, up at $283.74.
That’s still a ways off, but if Twilio maintain momentum, it can get there.
On the downside, though, look for a move below the 20-day moving average and uptrend support (blue line). Below puts the 50-day moving average in play.
Top Stock Trades for Tomorrow No. 3: MasterCard (MA)
MasterCard (NYSE:MA) has earnings coming up later this month, and shares are making a notable move ahead of the report.
With Monday’s nearly 3% rally, MasterCard is breaking out over downtrend resistance (blue line) and is working on going monthly-up over the June high at $315.64. Over that level, and MA may try to fill the big February gap between $323.50 and $338.50.
Nonetheless, a move below downtrend resistance really saps the bullish momentum out of this one. Although, the 20-day and 50-day moving averages should give it a boost near $300.
I would love a dip down to the 200-day moving average and recent range resistance near $290, although a close below this area is a big concern for longs.
Top Trades for Tomorrow No. 4: Stamps.com (STMP)
Stamps.com (NASDAQ:STMP), known for its violent moves, caught a lift on Monday. Shares climbed more than 5% after a positive mention from Citron Research, which allowed the stock to hit its highest level in almost two years.
With STMP clearing the $200 to $210 area, it not only gives it a possible level of support on the downside, it opens up upside potential as well.
If STMP can maintain above the 78.6% retracement (for the entire multi-year range shown), then it technically puts the $260-ish area in play. Above that gets us to stiff resistance near $290.
Below $210, though, and the 10-week moving average could put the 20-week moving average in play — as well as the June low at $166.19.
Top Trades for Tomorrow No. 5: S&P 500 (SPY)
The S&P 500 is hitting a new high amid the post-coronavirus selloff, as the index grinds toward the giant gap-down area between 3,257 and 3,340. The index is now up more than 45% from the lows, and rotating over the June high at 3,233.
I want to see how this performs as it gets toward the gap, and I particularly want to see how it performs should it begin to fill the gap. With earnings getting into full swing, it will be even more interesting to see.
If it fills the gap and continues higher, the prior high isn’t all that far off. On the downside, look to see if the 10-day moving average eventually fails. Below puts the 78.6% retracement in play at 3,136, as well as the 20-day moving average.
Investors watching the S&P 500 may consider also watching the SPDR S&P 500 ETF Trust (NYSEARCA:SPY).