All of the major U.S. indices hit new all-time highs on Monday as our Santa Claus rally gets off to a strong start. That said, let’s look at a few top stock trades for this holiday-shortened trading week.
Top Stock Trades for Tomorrow No. 1: General Motors (GM)
Last week, General Motors (NYSE:GM) was dipping into its 10-week moving average. It responded very nicely, giving bulls a nice bounce.
In fact, it was even giving us a weekly-up rotation by clearing the prior week’s high. However, it lost some of those gains by the end of the week. Now I want to see if shares can again go weekly-up by clearing $42.89.
Above will open the door to the $43.50 area, followed by $45 and then the current high at $46.71. On the downside, a break of $40 likely puts the rising 20-week moving average in play.
Top Stock Trades for Tomorrow No. 2: Nvidia (NVDA)
In fact, NVDA is showing signs of cracking. While it may prove to be a false breakdown, it’s not a sign of strength unless we get some signals for a reversal. In particular, Nvidia’s weakness despite a big day for tech is concerning.
The stock flirted with a move below the December lows, but has snapped back since. Losing the 100-day moving average now, the $510 area is definitely on watch.
Below it puts $500 in play, followed by the November low near $495. Who knows, maybe $475 is even tested. Perhaps it fails — I don’t know. All we can do is follow the trail and right now, it’s not acting like a leader.
On the upside, this one doesn’t get interesting until it closes above the 50-day moving average.
Top Stock Trades for Tomorrow No. 3: The Trade Desk (TTD)
The Trade Desk (NASDAQ:TTD) was nailed today, dropping about 10.6% on Monday.
The move sent it right back into that breakout area near $830, as well as the 10-week moving average. It is holding this zone for now and if bulls are in charge, it will continue to hold.
A break could open up TTD stock to a test of the $700 mark and the 20-week moving average. If it holds, look for a rally back to $900.
There are some concerns about speculation, high-growth tech and high-valuation stocks. If this group gets hit, TTD likely will too. That doesn’t mean it will happen this week or that it will happen at all. But there are some warning signs out there to be aware of.
For now, bulls are in control until proven otherwise, but Monday’s action is a shot across the bow.
Top Trades for Tomorrow No. 4: Goldman Sachs (GS)
As for warning signs, Goldman Sachs (NYSE:GS) doesn’t seem interested in them at all.
Now pushing into $260, the stock is pressing its all-time highs from 2018. It briefly made new highs as well (clearing that $260.56 mark).
Business surely remains strong and the valuation isn’t egregious with this one. Yet, the stock may be getting a bit stretched. If it breaks out over $260, then the $270 to $275 area is certainly in play. $300 could even be in the cards if this one really lets loose.
For now, bulls remain in control, particularly with GS stock above the 10-day moving average. A retest of the pre-coronavirus highs near $240 to $245 could be an attractive buying opportunity when the 10-day fails at some point.
On the date of publication, Bret Kenwell held a long position in Nvidia.