After a bumpy couple of days, the S&P 500 traded somewhat quietly on Friday, after bouncing off the 3,000 area and 200-day moving average. With that in mind, let’s look at a few top stock trades for next week.
Top Stock Trades for Monday No. 1: Zscaler (ZS)
Zscaler (NASDAQ:ZS) shares are ripping higher after better-than-expected earnings.
Coming into the event, shares were trading higher, grinding up in a modest channel (blue lines) and maintaining about the 20-day moving average. However, shares were struggling to clear the $77.50 level.
That is, until earnings. The stock opened up near prior 2019 resistance around $85, before surging up to $98 as shares ended the day Friday up 29%. From here, I wouldn’t be surprised to see $100 hit, with the 123.6% extension up near $101.
On the downside, however, I want to see prior resistance hold as support at $85 — along with the prior high near $90.
Top Stock Trades for Monday No. 2: Canopy Growth (CGC)
Canopy Growth (NYSE:CGC) stock is getting crushed on Friday, down just about 20% after disappointing quarterly results.
The move comes after last week’s breakout and this week’s continuation above the 200-day moving average and $20 mark. So, what now?
As you can see on the chart above, CGC stock tried to rally back over the $18.25-ish area, which was the April high and a significant level dating back to October 2019. However, shares were rejected on this move.
Bulls need to see this level reclaimed. If it can, it puts a gap-fill back up toward $20 in play, as well as the 200-day moving average. On the downside, I want to see the 50-day moving average and the backside of prior downtrend resistance (blue line) hold as support. Below puts $14 on the table.
Top Stock Trades for Monday No. 3: Occidental Petroleum (OXY)
Occidental Petroleum (NYSE:OXY) isn’t looking too hot, down 5% on Friday. Shares were unable to push higher, most recently failing at $15 before rolling over.
However, the lack of bullishness has been a multi-month process. Shares failed to reclaim the 23.6% retracement, before forming a series of lower highs. Now, it’s losing the 50-day moving average, as well as uptrend support.
From here, bulls need to see the $12.75 area hold as support. Below $12.50 and a retest of $10 isn’t out of the question.
Given how poorly the stock has done amid the big rebound in the S&P 500 and crude oil, traders may be better off looking elsewhere than OXY. I mean sheesh, crude just had its best month ever and Occidental is down about 20% for May.
Shares do not look attractive amid the current setup.
Top Stock Trades for Monday No. 4: Uber (UBER)
Shares of Uber (NYSE:UBER) have made an impressive climb from the March lows. The stock hit $14 in March and continues knocking on the 78.6% retracement just below $36.
The firm is in talks with GrubHub (NYSE:GRUB) to hammer out an all-stock deal. If the stock reacts bearishly to the news, we have to consider a pullback. In this case, look to the $31 area, where Uber will find its 200-day moving average and uptrend support (blue line).
On a breakout over the 78.6% retracement, look for a possible gap-fill up toward $40.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, he did not hold a position in any of the aforementioned securities.