With or without a great trading year, most of us are thankful to be wishing 2020 goodbye and welcoming 2021. That said, let’s look at a few top stock trades to ring in the new trading year on Monday Jan. 4.
Top Stock Trades for Monday No. 1: Apple (AAPL)
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Let’s start with the biggest stock of them all: Apple (NASDAQ:AAPL).
With its market capitalization of $2.25 trillion, Apple will likely always be an “all eyes on me” stock. Despite this, shares had been quite quiet over the past few months. Coming into December, I got bullish on this one and although it took a while to deliver, Apple really paid off well.
After hitting new all-time highs this week, shares have given us a “sell the news” reaction, which is not too surprising.
Now working on its third-straight daily decline, we have a nice reset down to the 10-day moving average. For active traders, that’s an opportunity. If support holds, we can look for a rotation back up the $138 resistance area. Above that, and the mid-$140s could be in play, with the 123.6% extension coming into play at $146.25.
I really don’t want to see Apple lose the $130 mark. Below $128, and uptrend support (blue line) puts the October high in play near $125, followed by a possible test of the 50-day and 100-day moving averages.
Top Stock Trades for Monday No. 2: SPDR Gold Trust ETF (GLD)
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Gold has been an interesting play after the SPDR Gold Trust ETF (NYSEARCA:GLD) ripped hard off its test of the 50-week and 10-month moving averages.
As a result, the GLD has rallied in four of the last five weeks, but it’s had a few false starts in that span. Now hitting its highest level since early November, bulls want to know if the yellow metal could have a bit more upside.
I want to see a more potent rotation, preferably one that takes the GLD over the 21-week moving average and this pesky VWAP measure. Above that will put the November high in play up at $183.53. Over that, and the all-time high near $194.50 is technically possible, followed by $200.
I prefer to wait for the rotation because these current measures — the 21-week moving average and VWAP — have been resistance. If that continues, we could reasonably see a dip down toward the $168 to $170 level.
Perhaps it will be a buyable dip, but we’ll have to wait and see.
Top Stock Trades for Monday No. 3: Moderna (MRNA)
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What a painful fall from grace we’ve seen with Moderna (NASDAQ:MRNA). Now down 40% from the all-time high on Dec. 1, Moderna has fallen for three straight weeks and in 12 of the past 16 trading sessions.
Ouch. But we’re coming into some potential support.
Moderna is trading down into the 50-day moving average and filling the last of its major remaining gaps. Admittedly, it did this two days ago, as Moderna now spends the last trading day of the year probing this week’s low and threatening to fall even further.
I want to see a failed breakdown here — referred to by some in the trading community as a “look below and fail” — where the stock briefly takes out support and the recent low, before reversing back to the upside.
If it’s a true breakdown, Moderna could be heading down toward $90 and the 100-day moving average. If it’s false breakdown, I want to see a move back up through the $115 area, followed by a test of the 161.8% extension near $120.50, then this week’s high of $122.88.
Above this week’s high and the 10-day moving average, and MRNA stock could get back to its bullish ways of strong rallies.
Top Trades for Monday No. 4: Cummins (CMI)
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Last but certainly not least on our final top stock trades list of 2020 is Cummins (NYSE:CMI). Seldom discussed as a trading vehicle, this name keeps itching to move higher.
The 10-week moving average had been support for months, but has wavered in December. That was no concern for longer-term bulls, as the 21-week moving average stepped in as support.
Last week, CMI stock gave us a two-times weekly-up rotation (clearing the high from the last two weeks) and closed strong on the week. It promptly fell flat on Monday and Tuesday though, before recovering virtually all of those losses as the week draws to a close.
In the first few weeks of 2021 (and preferably, the first few days), I want to see Cummins rotate over this week’s high at $228.68, opening the door to $238, then the all-time high near $245.
On the date of publication, Bret Kenwell held a long position in AAPL and CMI.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
