Stocks ended the week on modest gains, as bulls turn their attention to next week’s earnings report. With that in mind, let’s look at a few top stock trades for Monday.
Top Stock Trades for Monday No. 1: Amazon (AMZN)
Amazon (NASDAQ:AMZN) has been on a tear from the March lows. Even after the latest pullback, shares are still up about 80% from the lows.
The stock is now down for five straight sessions and failing to hold the 10-day moving average. To be honest, this is exactly what you want to see if you are a bull in Amazon. The last thing you want ahead of earnings is a surge higher into the print.
If shares continue lower ahead of the print, see if the 20-day moving average holds as support, followed by uptrend support (blue line).
Below these marks — either before or after earnings — puts the 50-day moving average and $2,500 breakout level in play. Over the 10-day moving average and $3,000, however, puts the 261.8% extension in play, up at $3,090. Above that, and the three-times range extension is in play near $3,300.
Top Stock Trades for Monday No. 2: Penn National (PENN)
Penn National Gaming (NASDAQ:PENN) has been strong over the past few days.
Shares bounced solidly off the $27.50 to $28 area, which has become support, and then broke out over downtrend resistance (blue line). Shares continue to hold above this mark — and the longer the stock does so, the more likely it is to test up into $40.
At $40 Penn finds resistance, but also the opportunity to break out. Above $40 puts the 123.6% extension in play near $47.50.
On the downside, though, a move back below the 20-day moving average could put $28 support back in play.
Top Stock Trades for Monday No. 3: Nio (NIO)
Nio (NYSE:NIO) was red-hot, but showing signs of exhaustion after last week’s explosion higher.
Shares lost the 10-day moving average on Friday, but the stock is currently holding the 20-day moving average and last week’s low.
Below that puts a gap-fill in play down toward $9.38. Below that, and Nio can fill the next gap at $7.91. If support holds, however, look to see if it can reclaim the 10-day moving average currently at $12.28. Above puts $15 in play.
Top Trades for Monday No. 4: Novavax (NVAX)
Novavax (NASDAQ:NVAX) has been one of the hottest stocks in the market. However, shares did exactly what we expected.
The stock gapped higher, tiptoed lower under resistance and is now bursting higher. Once it cleared downtrend resistance (blue line), it was off to the races. We have liftoff now and $150 can’t be off the table.
On a dip, see if the 10-day moving average holds as support. Below puts the 20-day moving average in play and $90. Below $90 and we have to let NVAX cool off a bit and settle down.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long NIO.