With a flurry of mergers and acquisitions (M&A) activity, the broader market jumped higher on Monday after a volatile week last week. Let’s see if it can sustain that action going forward through the rest of this week. In the meantime, though, let’s look at a few top stock trades.
Top Stock Trades for Tomorrow No. 1: DraftKings (DKNG)
DraftKings (NASDAQ:DKNG) shares caught fire on Monday, erupting more than 17% for the day.
The move sent shares ripping through the prior high near $45. Some investors may only focus on today’s action, but this should have been a focus name for traders on Monday. That’s as DraftKings action last week was very solid despite a pretty poor performance from the broader market.
With Monday’s move, DraftKings stock is rallying up toward the 123.6% extension at $48.86. The stock’s high of the day is actually one penny short of this mark. Above it and traders will surely try to push it to $50. Above $50 puts the 161.8% extension in play up near $55.50.
On the downside, though, I would look to buy the dip between $43 and $45. Below could put the 20-day moving average in play.
Top Stock Trades for Tomorrow No. 2: Oracle (ORCL)
Oracle (NYSE:ORCL) has a fascinating chart. The stock topped out at $59-and-change in July 2019, then again earlier this month.
One can see Friday’s gap above and fade below this level, which came after the company reported earnings. Shares again gapped above resistance on Monday’s news that it may very well win the TikTok bid after all.
While Oracle has declined from its session highs (and its opening price), it’s now holding resistance as support. Granted, it’s just one day’s worth of action, but it’s promising given what we’ve seen.
Below $59, and I don’t want to be long ORCL stock — even with the possible TikTok news out there. Technically, a close below this level will leave the 20-day and 50-day moving averages in play.
On the upside, however, look for a move above Friday’s high, at $61.86. Above puts the 123.6% extension in play at $63.83, followed by the 161.8% extension up over $71.
Top Stock Trades for Tomorrow No. 3: Nikola (NKLA)
Nikola (NASDAQ:NKLA) has been a volatile name thus far, as it seems to routinely move by double-digit percentages. Just the other day it was up more than 50% at one point, before taking out the low that preceded that move.
In any regard, the $28 to $30 level continues to hold as support. Below this area (and more specifically, Monday’s low at $28.75) will put the 200-day moving average on the table.
Below that measure, and the selling can accelerate.
On the upside, I’m inclined to wait for Nikola to reclaim its 20-day and 50-day moving averages. Below keeps the sell-the-rallies action in play. Above these marks puts $50 back in play, though.
Top Stock Trades for Tomorrow No. 4: Citigroup (C)
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After an extreme dip, Citigroup (NYSE:C) embarked on an extreme rally. That was followed by a very quiet, very narrow trading range.
Currently and unfortunately, that trading range is resolving to the downside. Citigroup shares are breaking support and the 20-week moving average with Monday’s 5.6% decline.
On a further dip, the $45 to $46 area will be in play. Below that puts the 23.6% retracement on the table at $43.04. If that doesn’t buoy the stock, Citigroup may fall into no man’s land.
On the upside, Citi has to reclaim the 20-week moving average and range support. Above puts range resistance in play around $52.50 to $53, followed then by a possible tag of the 50-week and 200-week moving averages.
On the date of publication, Bret Kenwell held a long position in C.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.