What do you get when you combine a quadruple witching day — the simultaneous expiration of single-stock options, single-stock futures, stock-index options and stock-index futures — with Tesla’s (NASDAQ:TSLA) inclusion to the S&P 500 and continued jawboning in D.C. heading into the weekend? A bumpy trading day, which is what we had Friday. Let’s look at some top stock trades.
Top Stock Trades for Monday No. 1: Darden Restaurants
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Darden Restaurants (NYSE:DRI) is somewhat muted after reporting earnings, down about 2% on the day.
The stock continues to slowly but surely inch its way higher after a wickedly volatile Q1 and Q2. Sheesh, look at that drop!
On the upside, it’s vital that DRI takes out and closes above resistance at $125. If it can do that, it could kickstart a massive breakout rally.
On the downside, see that DRI continues to hold the 10-week moving average and uptrend support (blue line). Below $105 could put the 50-week and 26-week moving averages in play.
Top Stock Trades for Monday No. 2: CrowdStrike
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CrowdStrike (NASDAQ:CRWD) broke to new highs on Friday, clearing $200 for the first time.
Take notice of this stock when it pushes through prior resistance. Each time the stock has broken over a key level, it has held that level as support going forward. This week, CRWD burst off the two-times range extension and cleared last week’s high.
For bulls that are still in this name, they can turn their attention toward $215. This level serves as the 261.8% extension for two different measures.
The first measure is from the Covid-19 low in March to the prior all-time high. The other measure is from the Q3 low to the Q3 high. This doesn’t mean CRWD will hit $215, only that it’s an upside area to keep an eye on.
As for the downside, new buyers are faced with a wide risk range for the time being, unless trading on a smaller timeframe.
Top Stock Trades for Monday No. 3: Winnebago (WGO)
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Winnebago (NYSE:WGO) is chugging higher on Friday, up more than 5% at close.
The stock is flirting with a breakout over the pre-coronavirus high from February. Above this level could put the June high in play near $72.50.
If the stock can’t hold above $63, then look for WGO stock to retest the 21-day moving average. Below that could send shares into the $52 to $53 area. There it finds the 50-day and 100-day moving averages, as well as the backside of prior downtrend resistance (blue line).
Top Stock Trades for Monday No. 4: BlackBerry
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Down more than 15%, BlackBerry (NYSE:BB) is clearly having the opposite reaction to its earnings report.
In early December, shares of BlackBerry exploded higher, but if readers will recall, I highlighted the peculiar action as shares endured a huge fade from the session highs. Since then, BlackBerry had wound itself into a very tight wedge ahead of earnings.
Breaking lower, it’s not a good sign for bulls. Shares are also knifing through the 20-day moving average on Friday.
From here, see how the stock handles the gap-up low at $6.92. If it breaks this area and quickly reclaims it and the 21-day moving average, bulls will have a reversal low to trade against.
If BlackBerry shares break this area and can’t reclaim it, see if $6.50 acts as support. Below puts a potential gap-fill toward $6.20 on the table, along with a possible tag of the 50-day moving average.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
