After a massive move, the stock market is taking a bit of a break on Friday, but that didn’t stop the S&P 500 from notching a new record high on the day. Let’s look at a few top stock trades for next week.
Top Stock Trades for Next Week No. 1: Ethereum
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Ethereum (CCC:ETH-USD) and Bitcoin (CCC:BTC-USD) led the surge higher in cryptocurrencies this week, with the latter hitting all-time highs. Ether came within a hair of its all-time highs.
Last time we checked on Ethereum, we were looking for a push up through $3,800, then over $4,000 to the highs. That has played out incredibly well. Now pulling back, I would love to see the $3,800 to $4,000 area act as support, along with the 10-day moving average.
If it can do that, then momentum will remain with the bulls and keep the $4,400 area on the table.
If that area fails as support, it opens the door to the 21-day moving average and the “B” leg high around $3,675.
Top Stock Trades for Next Week No. 2: Digital World Acquisition Corp
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Digital World Acquisition Corp (NASDAQ:DWAC) is the latest SPAC to become a meme stock and draw in a massive amount of momentum and investor interest. Everyone loves an incredible gain, but we’ve already seen DWAC rally 1,275% in two days.
How much more could really be left here? Back below $100 now and many investors may stop out. I’m not saying this is a buy or a short. I’m simply highlighting the levels.
Over $100 puts the 61.8% retracement of the entire range in play, at $111. Over that and it can squeeze higher again. Below $100 leaves the 50% retracement vulnerable, followed by $73 and the session low near $68. Below that and $50 or lower is on the table.
Also, don’t be tempted by FOMO — fear of missing out — with this one. There’s nothing that says you have to trade the trending names, no matter how popular they seem.
Top Stock Trades for Next Week No. 3: DraftKings
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DraftKings (NASDAQ:DKNG) is dipping lower on Friday, breaking below its recent consolidation zone. That’s not a great look for bulls.
The stock is testing down into uptrend support (represented by the horizontal blue line), a level bulls are hoping holds as support. If it fails, it opens the door down to the 21-month moving average, as well as the $41 to $42.50 area. That area should be support, based on DraftKings’ prior pullbacks.
On a rebound, we’ll need to see the stock reclaims recent short-term support near $48. Back above its short-term moving averages would put the $50.75 area back in play, potentially followed by the 50-day and 200-day moving averages.
Top Stock Trades for Next Week No. 4: Snap
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Last but certainly not least is Snap (NYSE:SNAP), which is plunging over 25% on Friday due to earnings.
The stock had been holding the $70 level as support, but there was an unfilled gap down at $64.74. That kind of bothered me, but the stock was doing so well, it wasn’t something I was too worried about.
With the post-earnings action we have now, there’s a whole other gap to worry about.
Shares are kind of in no man’s land right here. There are no real moving averages or prior key levels to lean on. If I had to pick a level, I’d focus on the Q3 low at $57.50.
If SNAP can quickly reclaim this mark, aggressive bulls could be long against the post-earnings low. That only works if Snap soon finds its footing. Otherwise, investors will have to wait for some kind of reversal or lower prices.
If it’s the latter, I’m watching the $48 to $50 area in this name.
On the date of publication, Bret Kenwell held a long position in SNAP. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.
