On Friday we got a jobs report that added a little extra spice to the market, as growth stocks remain volatile. That said, let’s look at a few top stock trades for next week.
Top Stock Trades for Monday No. 1: Costco (COST)
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Costco (NASDAQ:COST) has been trending lower for months now, but really began cascading lower over the last few weeks.
It’s lower on Friday after disappointing earnings. However, it’s catching a bid off the lows and rallying hard. It may be time to dip a toe in the water, especially if Costco can reclaim the 21-week moving average. Reversing higher on earnings would be very encouraging.
Not including Friday, Costco is down in 10 of the last 11 sessions. It closed slightly lower today, but the action is constructive as COST stock searches for a temporary bottom.
Back over $325, and perhaps a rebound up to the 21-week moving average is possible. On a break of Friday’s low, $300 could be in play.
Top Stock Trades for Monday No. 2: The Trade Desk (TTD)
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The Trade Desk (NASDAQ:TTD) is interesting, awesome and concerning all at once. It’s an awesome company with stellar growth, concerning because of its high valuation and interesting after a big pullback.
Shares exploded higher in 2020 before topping out near $973. At Friday’s low, shares were down 12%. We finally got that gap fill at $664 and the tag of the 200-day moving average, albeit TTD stock came in even harder than that.
The stock ultimately bounced off the 50-week moving average and reversed hard. From here, let’s see if TTD stock can reclaim the gap-fill level ($664) and push back toward $750, then some of the major moving averages.
Below the 200-day puts the 50-week moving average back in play, and below Friday’s low could put $520 on the table.
Top Stock Trades for Monday No. 3: Smith and Wesson (SWBI)
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Smith and Wesson (NASDAQ:SWBI) is wavering a bit after earnings, but it’s not breaking down necessarily.
Shares are below all of the major moving averages, but range support near $14.50 is holding firm, with SWBI stock giving us a nice bounce off the lows on the day.
The setup is simple: the stock needs to hold $14.50 and eventually reclaim the 200-day moving average.
If it can do that, see if it can push through $17.50 and test the 50-day moving average. Above that puts the 61.8% retracement in play.
Top Trades for Monday No. 4: Acacia Research (ACTG)
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Not often covered, Acacia Research (NASDAQ:ACTG) has been on my radar on the latest dip.
Shares pulled back into the $6 area and continue to hold the 50-day and 10-week moving averages. If it can hold the low (at $5.86), perhaps we’ll have seen the lows for now.
That said, let’s look for a rebound back over $7 before we start talking about upside targets. Priority No. 1 is seeing support hold and so far it’s working.
Top Trades for Monday No. 5: Gap (GPS)
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I zoomed out a bit for Gap (NYSE:GPS), using the weekly chart to capture a multi-year look.
Shares are green after reporting earnings on Thursday evening, as the stock works on its fifth straight weekly gain. While it took briefly out the 2020 high, it’s struggling with it near $27.
Now we have a reference point. Over $27, and the 2021 high is in play, at $28.39. Above that and $30.50 is on the table.
On the downside, I want to see support come into play at the 50-month and 200-week moving averages as well as on a backtest of prior downtrend resistance (blue line). Below that, and $20 is in play.
On the date of publication, Bret Kenwell held a long position in TTD and ACTG.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
