After gapping lower and selling off, the S&P 500 did a solid job of recouping some of its losses on Friday. With that in mind, let’s look at a few top stock trades for next week, which will be busy with earnings.
Top Stock Trades for Monday No. 1: Advanced Micro Devices (AMD)
Does this chart of Advanced Micro Devices (NASDAQ:AMD) look familiar? Well it should. I flagged the breakout in this name just the other day. Although, to be fair, I did not think a one-day gain of 16.5% was coming on Friday.
The move has sent AMD through both the 123.6% and 138.2% extensions. And with earnings on Tuesday, shares may continue to rally into the print. After reporting, though, it would be impressive to see these extensions hold as support on any sort of pullback.
On the upside, I want to see if shares can get to the 161.8% extension, up near $73. Above technically puts $75 and the two-times range extension in play over $80. If shares fill the gap near $62, however, then the $58 to $59 breakout level must hold as support should AMD fall that far.
Remember, AMD reports earnings on July 28.
Top Stock Trades for Monday No. 2: Tesla (TSLA)
Despite beating on earnings and revenue expectations, Tesla (NASDAQ:TSLA) coughed up all of its gains and reversed lower on Thursday. That selling pressure continued on Friday, as well.
Shares are now below the 10-day moving average and uptrend support (blue line). However, the 20-day moving average is holding up as support. If this level fails, we could see a notable move lower.
In that event, the first downside level of interest is $1,300, the most recent gap-up level. Below and shares could begin to fill a few gaps, the lowest of which is near $1,100 and the 50-day moving average. That would seem like a reasonable buying opportunity if the selloff is quick.
On the upside, though, see if Tesla regains the 10-day moving average. Above puts $1,650 resistance back in play.
Top Stock Trades for Monday No. 3: Nikola (NKLA)
The ride in Nikola (NASDAQ:NKLA) has been fun, but it may be over. Shares continue to violently roll over, Now down more than 60% from last month’s high.
For now, $30 is catching a bid. If it holds up as support, see if the stock can rebound to $42. Above that, and NKLA will face a key test vs. its moving averages and downtrend resistance (blue line).
If $30 fails, it could usher in a decline to the $20 mark and the 200-day moving average.
Top Trades for Monday No. 4: Taiwan Semiconductor (TSM)
AMD and Taiwan Semiconductor (NYSE:TSM) are erupting higher on the recent product delay announcement from Intel (NASDAQ:INTC), which fell more than 16% on the news (and after reporting earnings).
In any regard, TSM gapped higher to new all-time highs, as shares burst over the 161.8% extension, but found resistance at the two-times range extension. On the plus side, we now have our trading range.
On the downside, bulls do not want to see TSM lose the 161.8% extension and the $70 mark. If it does, the stock could go on to fill the gap into the upper-$60s.
On the upside, though, a move above the two-times range extension could trigger more upside, and potentially put the 261.8% extension in play up near $88. That would likely be a longer-term target.
Top Trades for Monday No. 5: Boston Beer (SAM)
Hello Boston Beer (NYSE:SAM). The stock looks more like a popping champagne bottle on Friday as the stock erupted more than 25%, and that’s just what some traders are doing if they’ve been long this name.
SAM stock has been on fire, more than doubling from the lows ahead of Friday’s move. It has now almost tripled from the March low.
Like TSM stock, though, we now have a nice trading range to watch. On the upside, see if Boston Beer can push through the 361.8% extension. If it can, it puts the four-times range extension in play up at $864.
On the downside, should shares fall below the three-times range extension near $720, SAM may finally need a rest. It could put uptrend support (blue line) in play, as well as a possible gap-fill down to $675. Look for an eventual retest of the 20-day moving average at some point, too.
I would think some traders are, at the very least, trimming a bit into this move.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret is long AMD.