After such a bumpy week, Friday gave us a quiet and sleepy session in the stock market. That said, let’s look at a few top stock trades for Monday.
Top Stock Trades for Monday No. 1: Bitcoin (BTC-USD)
Bitcoin (CCC:BTC-USD) continues to trade well, as bulls bid it off the session low. Coming into Friday, Bitcoin prices are up in six out of the past sessions. It’s now sitting back up at the highs.
Notice on the dip, Bitcoin bottomed just above the top of the prior range. The low came in at $43,171 while the high from the prior range is at $41,969.
I know the extensions sound kind of confusing, but this name is a great technical trade, so they are worth knowing. The 261.8% extension from the prior range (drawn in blue) sits up near $63,000. The 161.8% extension of the current range is all the way up near $67,700 (drawn in black).
If Bitcoin can clear $58,500 and make a push over $60,000, these are the levels that my attention would shift to.
On the downside, however, watch the 10-day moving average. Below could put $50,000 back in play. Below that puts the 50-day moving average on the table.
Top Stock Trades for Monday No. 2: Alibaba (BABA)
Alibaba (NYSE:BABA) continues to swoon as the headlines remain unfavorable. The Chinese government is cracking down, and that’s not doing any favors for Alibaba.
The chart shows just as much.
Perhaps investors will want to pass on Alibaba for stocks that are more in favor. However, Alibaba is likely getting attractive for value buyers, down almost 30% from the highs.
Shares are bouncing off the $230 area after filling the recent gap. Incidentally, this area is also the 2020 pre-coronavirus high.
If shares can take out this week’s high near $242, then a push up toward the 50-day moving average and $250 is in the cards. If we break this week’s low, Alibaba may need to retest the 100-week moving average.
Below that, and the December low is in play.
Top Stock Trades for Monday No. 3: JD.com (JD)
JD.com (NASDAQ:JD) reported pretty good earnings earlier this week, but quickly faded from those gains and is falling lower on Friday. The stock is now stumbling into the weekend at its weekly low, after breaking $85.22.
From here, bulls would love a flush down toward $80. That would likely be (but not guarantee) a great dip-buying opportunity. Not only is there support between $78 to $80, but the 200-day moving average is also in play there.
On the upside, though, we need to see JD stock fill Friday’s gap and reclaim the 10-day and 100-day moving averages. If these measures are resistance, shares could retest whatever low ends up being put in on the current decline.
Top Trades for Monday No. 4: Facebook (FB)
FAANG has been sleeping for months, and Facebook (NASDAQ:FB) is no exception.
The stock has been consolidating for months now, as it continues to put in a series of lower highs. It looked like it was trying to clear downtrend resistance on Thursday, but shares gapped down on Friday and sent it back below resistance.
Unfortunately, shares are below the 100-day moving average. However, its holding a number of key moving averages at Friday’s low — as well as the stock’s VWAP measure.
Next week, support needs to continue holding for the bulls. However, a rotation over $277.90 — this week’s high — would be bullish and put the 61.8% retracement in play near $281.50. Above that, and perhaps we can get a push up toward $290.
However, on the downside, a break of those key moving averages would be discouraging. But a close below $254 would be really disheartening.
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.