Stocks started off with a painful drop in Monday morning’s trading session and investors are still trying to figure out the depth of this decline. In the meantime, let’s look at a few top stock trades.
Top Stock Trades for Tomorrow No. 1: Roku (ROKU)
Roku (NASDAQ:ROKU) came to a distribution agreement with Comcast’s (NASDAQ:CMCSA) Peacock platform, but the modest open did not quite suggest such a strong move was coming.
The stock opened higher by 3.5% on the day, which was solid given the selling pressure engulfing the broader market. However, not many investors realized that would soon translate to 17% burst a few hours later.
The move was enough to send Roku to new all-time highs. From here, I would like to see shares pull back to the prior breakout level near $170 to $176. Even more though, I would love to see this prior resistance area hold as support.
As it currently shapes up, $200 is on the table if bulls can maintain control of this one. A longer-term price target of $250 is in play, should Roku hold up over the prior breakout point.
If it can’t hold up above that level, see that the 10-week moving average remains as support.
Top Stock Trades for Tomorrow No. 2: Gold ETF (GLD)
The SPDR Gold Trust ETF (NYSEARCA:GLD) has been struggling over the past few sessions. Despite plenty of gold bugs out there, the ETF is under pressure with the Fed not bringing much to the table in terms of stimulus last week.
Ultimately, last week’s weekly rotation higher couldn’t hold, while downtrend resistance (blue line) did hold.
With Monday’s gap down, the GLD opened below the 50-day moving average and quickly lost range support. In a sign of at least some strength, it is recovering that level now — but barely.
Monday’s buyers are looking for a rebound back to the 50-day moving average, with downtrend resistance and last week’s high near $185 in play above that. On the downside, they can use Monday’s low as a reference at $176.75. Below will put the 161.8% extension in play.
Top Stock Trades for Tomorrow No. 3: Aurora Cannabis (ACB)
This stock has been a total dud, as Aurora Cannabis (NYSE:ACB) has been locked in a brutal downtrend for months now.
While the rest of the market has been trending higher, ACB has been getting beaten lower and lower. With earnings on Tuesday, I’m not looking to get long this name.
After the report is out, let’s see if ACB can reclaim downtrend support (blue line) and rally up to the 20-day moving average. The latter has been pretty solid resistance for several months. Above puts channel resistance in play, followed by the 50-day moving average.
On the downside, keep the $5.30 low in mind from May. A close below is not a good sign.
Top Stock Trades for Tomorrow No. 4: AutoZone (AZO)
AutoZone (NYSE:AZO) topped in December, was hammered in March (like most names) and has enjoyed a robust rebound since.
However, $1,250 remains as stiff resistance, as shares are now repelling hard off that mark. The stock is down several percent on Monday and is working on its fourth straight daily decline.
Bulls are hoping this $1,140 to $1,160 area can hold as support. There AZO finds uptrend support (blue line), the 78.6% retracement and the breakout level from July. Below will put the 200-day moving average in play near $1,100.
On the upside, I want to see the AZO reclaim the 20-day and 50-day moving averages. Above puts $1,250-plus back in play.
On the date of publication, Bret Kenwell held a long position in ROKU.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.