It was another one of those choppy Friday trading sessions in August, with many traders opting for the beach over the trading screens. With that in mind, let’s look at a few top stock trades for next week.
Top Stock Trades for Monday No. 1: Tesla (TSLA)
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Tesla (NASDAQ:TSLA) caught a booming three-day lift after announcing a 5-for-1 stock split earlier this week. The stock is now up about 20% in this stretch and the timing couldn’t have been better.
Downtrend resistance (blue line) was squeezing shares lower, while Tesla was below the 20-day moving average and clinging to support near $1,365. Wednesday’s rally burst Tesla stock back over these key marks and now the stock continues to drift higher.
This $1,650 area has been troublesome for Tesla before, but if it can clear this level it puts the all-time high from July in play near $1,795. It may be hard to believe, but a close over this level could put the 261.8% extension in play at up near $1,970.
On the downside, see if the 20-day moving average now acts as support. Below and $1,365 is back on the table and we’ll need to re-evaluate the stock.
Top Stock Trades for Monday No. 2: iQiyi (IQ)
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Shares of iQiyi (NASDAQ:IQ) are getting buried on Friday, down about 11% on earnings and on news of an SEC probe.
In many investors’ minds, SEC probes equal sell, and that’s just what they are doing on Friday. Shares are gapping below the 200-day moving average and the July low, putting iQiyi stock sort of in no man’s land here.
Is $16 up next? It’s not out of the question at this point, with no notable, or at least dependable, support levels nearby.
For now, let’s give IQ some time to set up on its own. On the long side, look to see if it can reclaim the July low first. Above puts the 200-day moving average and potentially more upside in play.
Top Stock Trades for Monday No. 3: Aurora Cannabis (ACB)
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This is one of the most well-defined down trends I’ve seen in a long time. Aurora Cannabis (NYSE:ACB) is stuck below the 20-day and 50-day moving averages, as well as downtrend resistance (blue line).
On a break to the upside, see that ACB reclaims the 50-day moving average. For good measure, above $12.50 would be more promising and potentially put the 200-day moving average in play.
On the downside, a break of the $9.75 area near the August lows spells trouble. Specifically, it could put $8 in play, followed by a gap-fill to just below $7.
Top Stock Trades for Monday No. 4: Applied Materials (AMAT)
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Applied Materials (NASDAQ:AMAT) has been trading higher in a very controlled manner. This upward channel has seen shares almost double over the last few months.
The stock is moving higher on Friday after better-than-expected earnings. However, shares are also dipping from the session highs after a quick break to new all-time highs.
So, what now?
On a close over $68.95 — the February high — puts the 123.6% extension in play up at $76.61. If the stock can’t get over that mark, or even if it does but then soon sells off, see that support comes into play from the 20-day moving average and channel support (blue line). Below puts the 50-day moving average in play.
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.
