It was a back-and-forth trading session on Friday — what else is new — that ultimately led a slight rally on Wall Street. With that in mind, let’s look at a few top stock trades for next week.
Top Stock Trades for Monday No. 1: Twilio (TWLO)
Twilio (NYSE:TWLO) is set to report earnings on Monday, Oct. 26. After breaking out to new highs near $340, shares have pulled back. Is it enough to warrant a post-earnings rally?
If earnings weren’t around the corner, this dip into support would look pretty attractive. The prior highs near $280 to $285 held as support, as Twilio is now rallying back over $300.
On the upside, bulls will be looking for a close above $340. Above that could put the 461.8% extension (from the March low to the preceding 2020 high) in play at $368.
On the downside, though, a close below $280 would put the 100-day and 50-day moving averages on the table. Below that, and $220 could be on deck.
Top Stock Trades for Monday No. 2: Snap (SNAP)
I covered Snap (NYSE:SNAP) earlier in the week after its monstrous earnings move. That rally was met by selling at the 261.8% extension.
On a move over that mark, I said investors should look for a test of the three-times range extension at near $43.50. Almost there now and investors are wondering what to do with their long position.
First, pat yourself on the back. Second, consider how to proceed.
Some may want to fish for a full test of the three-times range, followed by a possible move to $50. Others may consider taking some profits here and riding it higher. A few investors may even consider parking a daily stop just below the 261.8% extension.
This key level has been relevant all week and a close below this mark would be bad news.
Either way, there are multiple ways to proceed from this point forward. No matter what risk management principles investors implement, many will be looking to buy on the dip. In that case, consider waiting for an eventual test of the 10-day moving average.
Top Trades for Monday No. 3: Spartan Energy Acquisition (SPAQ)
We also looked at Spartan Energy Acquisition (NYSE:SPAQ) recently.
In that assessment, I said bulls needed to reclaim $14 to regain control and that a move below $12.50 support would put the 200-day moving average in play.
Earlier this week, SPAQ broke decisively below $12.50. On Thursday, it broke aggressively below the 200-day moving average. Perhaps aggressive bulls can justify a dip buy now, looking for a rebound back to $11, then the 200-day moving average.
However, a close below Friday’s low will not be a good look. That said, shares are down in six of the least seven sessions, and while it’s a risky setup, SPAQ stock looks due for a bounce.
Top Stock Trades for Monday No. 4: Gilead Sciences (GILD)
Gilead Sciences (NASDAQ:GILD) continues to trade like crap. After breaking to new 2020 lows earlier this week, shares popped on Friday morning.
However, those gains couldn’t be maintained, as downtrend resistance (blue line) and the 50-day moving average rejected the stock. Now what?
Below $61, and the monthly lows are in play. If broken, see if the stock quickly reclaims the $60 level — known as a “look below and fail” setup.
In any case, bulls need to see shares close above the 50-day moving average to get any sort of sustained rally to the upside. On the downside, a break of $60 could put the $56 to $58 area in play, which has been multi-year support.
On the date of publication, Bret Kenwell held a long position in TWLO.