After a strong-breadth rally for the bulls on Wednesday, the sellers lined up and whacked equities lower on Thursday ahead of the long three-day weekend. With that in mind, let’s look at a few top stock trades for next week.
Top Stock Trades for Monday No. 1: Walmart (WMT)
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What do you do when the rest of the market is getting crushed? Simple. You look for the stocks that are trending higher.
In this case, Walmart (NYSE:WMT) continues to do quite well. On Tuesday, shares tested down into the rising 10-day moving average and retested the prior breakout zone near $152.50.
Now setting up as inside week, bulls will be on the lookout for an inside-and-up rotation over this week’s high, currently at $158.29. If they get it, that could put the $162 level in play, followed by $165 to $170.
On the downside, though, this stock remains healthy provided it stays above the 10-day and $152.50 level.
Top Stock Trades for Monday No. 2: Bank of America (BAC)
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Bank of America (NYSE:BAC) is moving lower as bank earnings start to roll in — but not its earnings. The company will report on Monday.
In any regard, today’s action has BofA breaking below the prior 2022 low. If it rallies next week, bulls need to see the stock reclaim this level, then ideally trade up through the weekly VWAP measure and this week’s high at $40.40.
That will put the 10-week, then 50-week moving average in play.
On the downside, however, a continued selloff opens the door to the $34 to $35 level, then the monthly VWAP measure and 200-week moving average near $32.50 to $33.
Top Stock Trades for Monday No. 3: Vertex Pharmaceuticals (VRTX)
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Like Walmart, bulls have to follow the money. In this case, Vertex Pharmaceuticals (NASDAQ:VRTX) is one of the strongest stocks we can find right now.
The stock has rallied in 14 of its last 17 sessions and finished 2.4% higher on Thursday. Good. That could give us a buy-the-dip opportunity if this one times up right.
If we get a pullback, I’m watching last week’s low near $279 and the rising 10-day moving average. I really have not seen a stock look this good in a while, so this is one I want to keep on my radar.
Top Trades for Monday No. 4: ConocoPhillips (COP)
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Speaking of strength, have you seen the oil market? Crude is bouncing hard back into a key level as we speak. If it can hold here or push higher, it could give energy stocks another bid.
Look at ConocoPhillips (NYSE:COP). The stock has strong earnings growth, a solid dividend yield and a reasonable valuation. It also has an inside week.
Like Walmart, this has been a relative strength leader that’s now pulling back and is giving us some consolidation via trading within the prior week’s range. If we can get an inside-and-up rotation over $102.40, it puts the highs back in play near $107.50, then potentially the 161.8% upside extension near $114.
Conversely, a move below $97 could open the door to $90 and the rising 21-week moving average.
On the date of publication, Bret Kenwell held a long position in WMT. 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.
