Monday will mark the last trading day of August, as investors turn their attention to September and begin to flip through the monthly charts looking for new setups. With that in mind, let’s look at a few top stock trades.
Top Stock Trades for Monday No. 1: Chewy (CHWY)
I love the way Chewy (NYSE:CHWY) has been trading. And given the momentum we’re seeing in technology and e-commerce, it only makes sense that that momentum starts to creep into Chewy stock.
I have been vocal about this one breaking out. And with shares hitting new all-time highs, we’re getting the move we were looking for. Shares have done a good job riding the 10-day moving average, while uptrend support (blue line) seems to be giving Chewy the boost it needed.
If we measure from the March low to the June 2019 high, we get a two-times range extension near $62. Near there now, investors will be looking for a further run, potentially ahead of earnings scheduled for Sept 10. A longer term price target could be the 261.8% extension, up near $75.
On the downside, though, a break of the 10-day and 20-day moving averages and uptrend support, could put the $52.50 level back in play.
Top Stock Trades for Monday No. 2: Tesla (TSLA)
Tesla’s (NASDAQ:TSLA) 5-for-1 stock split will go into effect on Monday. AND After rallying 60% in 13 trading sessions and amassing a market capitalization of more than $400 billion, is Tesla finally running out of energy?
If not, look for a run to the 361.8% extension at $2,588. If it gets there, it will put shares past $500 on a split-adjusted basis.
On the downside, however, a move below the three-times range extension at $2,205 could put the 10-day moving average back in play — as well as the 161.8% extension at $1,969.
I don’t want to call Tesla a bubble, and I don’t bet against exponential risers like this. But ultimately, this type of move is not sustainable, in my experience. That said, bravo to the bulls in this one.
Top Stock Trades for Monday No. 3: Zoom Video (ZM)
Zoom Video (NASDAQ:ZM) continues to trade quite well, although it’s looking more and more indecisive near current levels.
Shares finally broke out over $275 earlier this month, a level that has now been acting as support. So is the 10-day moving average. If Zoom loses a bit of momentum, though, these two areas will be the first spots bulls look for a bounce.
Below them could put the 50-day moving average in play, which historically has been a great buying spot (with the exception of its test in August).
So far, $300 has been a better sell than buy, although Zoom isn’t getting hammered from this spot. Let’s see if shares can rotate over this level and continue higher. A close above this week’s high at $303.58 would be a good start.
Also, keep an eye on travel stocks and “anti-coronavirus” plays. If they gain momentum, the so-called “Covid-stocks” may start to dip — like Zoom.
Top Stock Trades for Monday No. 4: Digital Turbine (APPS)
Digital Turbine (NASDAQ:APPS) is gaining attention among traders. This name gapped up impressively earlier this month and ran to $28 before topping out.
For now, the dip to the 20-day moving average is triggering a bounce. Let’s see if it’s enough to send APPS back to $28. Above $28, and $30-plus could be in play.
If the stock takes out this week’s low at $22.30, it puts the gap-up low in play at $19.32, along with uptrend support (blue line). Below that and the 50-day moving average is on the table, followed by a full gap-fill toward $16.30.
Top Trades for Monday No. 5: Big Lots (BIG)
Big Lots (NYSE:BIG) is striking out on earnings, dipping 10% after reporting its quarterly results.
On the plus side, though, shares are dipping down to the 20-day moving average and two-times range extension. If it holds, look for a rotation back up to the highs near $57.25. Above that puts the 261.8% extension in play at $61.08.
Short of a gap-down or big flush, the current dip gives buyers a reasonable risk/reward.
On the downside, a break of current support likely puts $43 to $45 in play. There, Big Lots finds a prior breakout level, the 50-day moving average and uptrend support (blue line).
On the date of publication, Bret Kenwell held a LONG position in CHWY.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.