A big gap-up on Friday came after a massive selloff on Thursday. However, the bounce was sold into as the market remains quite mixed. With that in mind, let’s look at a few top stock trades for next week.
Top Stock Trades for Monday No. 1: Starbucks (SBUX)
Starbucks (NASDAQ:SBUX) stock has had a rough couple of days. After pushing through $80 resistance and the 200-day moving average, the stock has come under pressure.
With Friday’s bounce, the stock is reclaiming the 50-day moving average and making up for some of Thursday’s 8.2% decline. What now, though?
Aggressive bulls can buy with Starbucks over the 50-day moving average, and use Friday’s low as their stop-loss. It might be more advantageous to wait and see how the setup develops into more significant areas, though.
A move below this week’s low at $72.15 puts the 50% retracement in play. Over Thursday’s high puts $80 and the 200-day moving average in play. That’s a nimble setup, but one that could give short-term traders an opportunity into notable support and resistance levels.
Top Stock Trades for Monday No. 2: Lululemon (LULU)
Lululemon Athletica (NASDAQ:LULU) stock is stumbling after a post-earnings slip. However, the stock is finding support at the 20-day moving average.
For now, it’s holding. And if it continues to hold, look for a move back over $300. If LULU can do that, then it puts the $320 area back in play.
On a dip, though, I want to see if uptrend support holds (blue line) — along with the prior high near February near $266. Below that mark puts the $250 level in play, which is not only a big breakout level, but also the 61.8% retracement and the 50-day moving average.
Top Stock Trades for Monday No. 3: Hertz (HTZ)
I have one word about Hertz (NYSE:HTZ): Avoid.
There’s a sizable gap in this $1.30 to $2.80 range, while support was at $5 and is now acting as resistance. Even though the company is working through a bankruptcy situation, the company plans to sell stock to raise cash (that’s a new one). The 50-day moving average continues to weigh on the stock price, too.
If bankruptcy wasn’t on the table, then this one could be one to trade. It still can be if investors are okay with the risk, but I personally don’t like the binary risk here.
A move below $1.30 could put sub-$1 in play. But if the move takes place, it might happen overnight. In other words, it could be difficult — if not impossible — to limit one’s risk via technical levels. Over the 50-day moving average, however, puts $5 in play.
Top Trades for Monday No. 4: Zoom Video (ZM)
With coronavirus cases on the rise, Zoom Video (NASDAQ:ZM) is back in play.
The bulls remain in full control, with shares holding up over the 10-day moving average, while $225 is clear resistance. If the stock can breakout over $225, it puts $250 right back in play. At $246, the four-times range is in play from the Q4 low to the 2019 high.
If shares pull back below the 10- and 20-day moving averages, let’s see if we get a test of $180 — the prior breakout level. A pullback to this level may also time up with uptrend support (blue line) and the 50-day moving average. If not, see if these marks hold as support if they are tested.
Overall, Zoom Video is a buy-on-dips candidate until proven otherwise.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret is long SBUX.