It was a quiet trading session on Friday, with U.S. stocks rising modestly ahead of a three-day holiday weekend. Will we see more selling pressure next week or will positive trade talk give stocks a lift? When one tweet can move the market, it’s impossible to say. So let’s look at a few top stock trades out there.
Top Stock Trades for Tomorrow No. 1: Roku
The other day we opted to cover PepsiCo (NYSE:) over Roku (NASDAQ:), but promised to look at the stock on Friday. Well, here we are and this beast has gotten even stronger. Shares are up more than 6% on the day and have risen above $95. The run has been nothing short of amazing.
We’ve been pounding the table on Roku, calling it a buy in Q4 and Q1. Now it’s almost up to $100 a share. Should you get long now?
No. Shares are up more than 70% in about five weeks. It has almost quadrupled from its December lows (not that it deserved to be that low in the first place). But the point is still the same: you’ve missed the boat.
I love ROKU over the long term, but to think that we won’t see sub-$95 prices again is absurd. With the stock overbought in the short-term and coming into possible resistance, hedging and/or taking some profits doesn’t seem like a bad idea at this point … at least until lower prices come around.
Top Stock Trades for Tomorrow No. 2: Splunk
Splunk (NASDAQ:) is going splat, falling 7% on Friday after reporting earnings. The move forced a test of the 200-day moving average, which held as support.
Aggressive bulls who feel compelled to go long SPLK stock can do so against Friday’s low.
I would love a lower open near the 200-day on Tuesday that quickly reclaims Friday’s close and goes green. Preferably, SPLK would also reclaim the 50% retracement at $120.78 in the process.
If it falls under Friday’s low, SPLK can go even lower. On a rally, we need to see if it can climb back to Friday’s highs near $130, and/or the 20-day and 50-day moving averages.
Top Stock Trades for Tomorrow No. 3: Autodesk
Autodesk (NASDAQ:) is off by more than 5% on Friday after disappointing earnings results. Shares are bouncing off that $157.50 to $158 area, but are now meaningfully below the 50-day moving average for the first time since early January.
Below $155.56 — the 38.2% retracement — aggressive bulls who are getting long on Friday’s decline may want to consider stepping out. It would put ADSK below several key support levels and suggest that sellers have not yet exhausted themselves. In that case, look for a possible test of the 200-day.
Reclaiming the 50-day would repair some of the damage, but beware that this level may act as resistance. That would give short-sellers an entry, with a retest of the $158 area in mind.
Top Stock Trades for Tomorrow No. 4: Novartis
Novartis (NYSE:) stock is up almost 4% after getting approval for its $2 million-plus gene therapy treatment.
The move has NVS hitting new highs in Friday’s session. The stock has been largely limited by channel resistance and buoyed by channel support. As it hits channel resistance, we’ll have to watch to see if NVS will break out to a new range, or be limited in upside as a result.
As long as $84.50 to $85 holds as support, NVS looks good to buy on the dips.
Bret Kenwell is the manager and author of and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long ROKU.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.