The market ended the week on a high note. While growth stocks squirm in a bear market, the overall market continues to stand strong. That said, let’s look at a few top stock trades for next week.
Top Stock Trades for Monday No. 1: Bitcoin (BTC-USD)
While altcoins continue to soar, Bitcoin (CCC:BTC-USD) has had trouble advancing.
Although Bitcoin isn’t under as much pressure as it was in April, it’s far from soaring. Could that change with a breakout?
The cryptocurrency looks like it’s trying to set up for a move higher, although the $58,000 level continues to act as resistance. If Bitcoin can clear this level we could see a move over $60,000 in quick fashion.
Over $60,000 puts the $65,000 area in play, then $67,600. On the downside, though, Bitcoin has a lot of notable moving averages close by. However, if it loses the 10-week moving average — thus losing all the others — we could see a retest of the $47,000 to $50,000 area.
Below that, and the 21-week moving average may be in play, followed by $43,000.
Top Stock Trades for Monday No. 2: Square (SQ)
Square (NYSE:SQ) reported solid earnings, but like I said at the top, growth stocks remain under pressure. As a result, we’re not seeing a robust move to the upside.
In fact, Square is having a very difficult time reclaiming some of key moving averages, like the 10-day, 50-day, 10-week and 21-week moving averages.
With these acting as resistance, it’s hard to be overly bullish on the stock in the short term, regardless of how good it is or how many investors love it.
However, over the key $244 mark and that outlook changes. Above that level, and $250 is possible, along with a test of the 21-day moving average. Above those measures and $275 resistance could be on the table.
On the downside, however, if Square takes out this week’s low at $216.70, then $200 and the 200-day moving average is possible.
Top Stock Trades for Monday No. 3: Cummins (CMI)
This stock is a good lesson too. We didn’t just buy CMI stock over the last few weeks thinking it’s consolidating nicely and set for more gains. We want some form of upside rotation. Notice five straight weeks of Cummins riding the 10-week moving average but not rotating higher.
Then last week it closed at the lows and gave us a five-times weekly-down and monthly-down rotation. Ugly!
But we weren’t in it, because there wasn’t an upside rotation.
Now, buying the retest of the 21-week moving average and $250 breakout level was great. But now we’re seeing a six-times weekly-up and monthly-up rotation. A close over $266.50 puts $275 to $277 in play.
Let’s see if CMI stock can gain some momentum here.
Top Trades for Monday No. 4: Rocket Companies (RKT)
Last but not least, let’s look at Rocket Companies (NYSE:RKT). This stock has been creamed, down more than 50% from the highs. In just the last two days, shares are down more than 20%.
Breaking below $19.37 was an issue, as it opened the door to the $17.50 to $17.78 area.
I want to see one of two things here. First, does RKT stock even test this area at all? Second, if it does and it breaks below it, can RKT stock reclaim these levels and/or the current low?
If so, a reversal could be brewing and at least give longs a low to measure against. After all, there is a massive gap to fill on the upside.
On the downside, a close below $17.50 with no reversal will thrust RKT stock into no man’s land.
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.