It was a slow and methodical grind higher for most of Monday, as investors kickoff the last full trading week of March. That said, let’s look at a few top stock trades as we look toward the rest of the week.
Top Stock Trades for Tomorrow No. 1: Snap (SNAP)
Snap (NYSE:SNAP) was one the best-trading stocks in the fourth quarter. That momentum carried into 2021 as shares surged to new highs in February. However, it’s been wavering a bit since.
Monday’s dip down toward the 21-week moving average is being bought aggressively, as shares hammer higher from the mid-$50s. However, we need to see some sort of rotation, particularly with potential resistance just above the stock price.
Specifically, I want to see Snap rotate over Monday’s high and close above the 10-week and 50-day moving averages. If it can clear $60, then the 21-day moving average and that troubling $65 area is on the table.
If shares fail to reclaim the 10-week and 50-day, then Monday’s low remains vulnerable, while a test of the 100-day moving average remains on the table. A close below that could put $48 to $50 in play should Snap come under heavy selling pressure.
Top Stock Trades for Tomorrow No. 2: Deere (DE)
Deere (NYSE:DE) has been a very impressive performer, surging about 270% from the March 2020 low. Not many would have expected such a big move from an old company like this.
Yet, here we are.
Shares are giving us a quick but orderly pullback to the 10-day moving average amid a strong upward trend. For most bulls, pullbacks are buying opportunities until the trend fails.
If the 10-day fails, perhaps the stock will need more time. A longer-term dip toward $335 and the 50-day moving average would be attractive too. But for now, we’ll take what we can get, which is a short-term dip to short-term support.
Top Stock Trades for Tomorrow No. 3: Canadian Pacific (CP)
Like Deere, Canadian Pacific has been a great trend trade. The 50-day and 10-week moving averages have done a good job keeping CP stock afloat — and “afloat” is a good word in this case.
These support level aren’t like stiff beams that provide an instant bounce. Instead, they’re like a trampoline, allowing the stock to sink below them before ricocheting higher.
The 50-day moving average is often stressed in this case, but the 100-day has gone without a test in several quarters. Testing down into the former level now, what can investors expect?
The acquisition adds a bit more uncertainty to the price action. However, I’d be looking for a potential decline into uptrend support. Should it fail, look for support at $350 and the 100-day moving average.
No matter where support comes into play — whether it’s right now or slightly lower — look for a rotation back over the 21-day moving average. That could put the $380 area on the table, followed by a test of the highs.
Top Trades for Tomorrow No. 4: Box (BOX)
Speaking of mergers and acquisitions (M&A), Box (NYSE:BOX) is reportedly exploring a sale, hence Monday’s spike. And where did that spike send the stock?
Right to the 161.8% extension.
Shares did a great job breaking out over that $21 level earlier this month, then holding it as support. That’s really the only confirmation bulls needed, although it helps that it held the 10-day moving average on that dip as well.
From here, let’s see if Box can continue to hold the 10-day, as well as the prior high near $22. The longer the stock stays above these marks, the better our odds are that it will climb back beyond $25.
A close above the 161.8% extension could put $30-plus in play.
On the date of publication, Bret Kenwell held a long position in DE.