[Editor’s note: This article is regularly updated to keep it relevant to the current week.]
A refreshingly quiet open greeted traders Monday morning. And stocks ended up over 3% to keep the bullish vibes alive. In light of the positive action, we’re looking at the top stock trades for tech lovers to consider this week.
The technology sector had some of the best-behaved equities during the market meltdown. As a result of their resilience, many are flashing attractive chart setups in the wake of last week’s robust rally. To discover candidates for today’s gallery, I sorted my watchlist by Relative Strength Index (RSI) levels, and focused on which stocks had the highest readings.
As the name suggests, the RSI is designed to reflect a stock’s strength or weakness based on the speed and change of recent price movements. This month’s crash jammed the RSI of most stocks into the basement. That said, consider today’s selections some of the companies that have seen their share prices snapback the hardest.
Now, let’s take a closer look.
Top Stock Trades for This Week: Amazon (AMZN)
Off the Lows: 21%
Amazon (NASDAQ:AMZN) is the first of our top stock trades for the week. Shares of AMZN stock suffered alongside everyone else during the initial stages of the plunge. From peak-to-trough, the e-commerce giant lost over a quarter of its value. But as the narrative of social distancing and quarantine actually working to Amazon’s benefit has gained acceptance, buyers have returned.
AMZN stock is now up 17% since carving out a low mid-month and has climbed back above all major moving averages. Monday’s surge even eclipsed a short-term resistance zone, giving the green light to new bulls. The RSI pushed north of 50 and now sits on the bullish side of its midpoint.
Purchasing shares here with a stop under the 20-day moving average ($1860) looks good for a trade.
Slack Technologies (WORK)
Off the Lows: 87%
Slack Technologies (NYSE:WORK) is the next one of our top stock trades for the week,
WORK stock has seen incredible volatility over the past two months, driven in large part by its earnings report. At the beginning of the month, it crashed nearly 40%. And now, it’s risen almost 70% off the lows to essentially end the month where it began. WORK stock sat out Monday’s rally by ending down 1.29%, but the short-term weakness doesn’t bother me given its enormous rise.
We’re sitting at resistance and due for a rest anyway. Within my watchlist, WORK’s RSI of 61 is second only to Zoom Technologies (NASDAQ:ZM). I think after some consolidation, Slack shares could be set for an easy breakout trade over $30.
Off the Lows: 47%
Bears who overstayed their welcome in Nvidia (NASDAQ:NVDA) are being roasted and toasted. The popular semiconductor stock built a powerful V-shaped reversal and has reclaimed much of what was lost. Like Amazon, NVDA stock is now above its 50-day moving average, officially placing it back in uptrend status.
Resistance at $285 is the next target. A break below the 20-day near $240 would sour my outlook. Until then its game on for buyers. At 56, the RSI is sitting at its highest point of the recovery and bodes well for the stock moving forward.
Stock traders can consider buying shares here with a stop below $240. For a cheaper option, you could buy the May $275/$285 bull call spread. Either way, NVDA is one of the top stock trades for the week.
As of this writing, Tyler Craig didn’t hold positions in any of the aforementioned securities. For a free trial to the best trading community on the planet and Tyler’s current home, click here!