Thursday marks the last trading day of the week, with Friday closed for the holidays. Next week is the “Santa Claus” rally, where the S&P 500 and Nasdaq have been up 70% of the time over the last 19 years. With that in mind, let’s look at a few top stock trades going into the last trading week of the year.
Top Stock Trades for Monday No. 1: Tesla (TSLA)
If you guys want me to keep it real with you, I have a great trade write-up on Tesla (NASDAQ:TSLA). I break down how I approached the stock and why I was watching it. But then mistimed the entry and turned what should have been a great trade into a stop-out.
There is no reason to lie or hide from losses. In this instance specifically, it contained a great lesson and I hope it can help some of you when it comes to your trading.
As for Tesla now, the stock tagged the 21-week moving average and went daily up in Tuesday’s session. With Wednesday’s rally, it also reclaimed the 10-day moving average and closed above $1,000.
From here, I want to see if the stock can climb up to the $1,025 to $1,035 area. There it finds the 21-day and 50-day moving averages. Above that, and $1,100 is in play.
On the downside, however, let’s see if the 10-day moving average is support. If not, the gap-fill level down near $940 is on the table.
Top Stock Trades for Monday No. 2: Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) has been stalling a bit lately, struggling with the $340 area on the upside but finding support down near $320.
Working on its third-straight daily gain, the stock has reclaimed the 21-day and 50-day moving averages. If it can continue higher, I have my eye on that gap-fill level up near $339.
There it will also find downtrend resistance (blue line).
If it’s able to push through this area, the next two upside marks are obvious: The December high at $343.79 and the November high (and all-time high) up at $349.67.
On the downside, though, bulls want to see the stock hold the $328 to $330 area — where Microsoft stock finds a bevy of moving averages.
Top Stock Trades for Monday No. 3: Twitter (TWTR)
Twitter (NYSE:TWTR) is a pretty interesting setup. Not only are most social media stocks under pressure, but Twitter has a recent CEO change. Despite that, the stock continues to struggle.
Shares are being squeezed lower by the 21-day moving average while clinging to the 200-week moving average.
If the stock can push through the 21-day moving average and clear $45, we could see a quick move into the upper-$40s and potentially the 50-day moving average (currently just above $50).
On the downside, however, we need to see the $41 level hold as support. Twitter stock is working off a minor higher low, but a break of $41 that’s not quickly reclaimed spells trouble for the stock.
Top Trades for Monday No. 4: Ford (F)
Last but not least, we have Ford (NYSE:F). I was so excited about this stock when it broke out over $20.50.
Not only is that level the two-times extension from the summer range, but it’s also been recent resistance. Interestingly, the 161.8% extension from the same range has been support.
And they say Fibonacci extensions are meaningless.
In any regard, the breakout earlier this month sent shares to the 261.8% extension of the larger range, where Ford promptly reversed and fell back into its current trading range. Bummer. From here, let’s wait for one of two things.
- A breakout over $20.55, thus putting $21.25 back in play, followed by a potentially longer-term push up to $23.
- A pullback to range support near $19 could also get us the first touch of the 50-day moving average since September and I like that setup as well.
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.