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5 Top Stock Trades for Monday: SPY, FB, LK, CAT, NVDA

After ripping higher off the lows on Thursday, the market set us up for a rug-pull on Friday, with equities diving on the day. Let’s look at a few top stock trades heading into next week.

Top Stock Trades for Tomorrow No. 1: S&P 500 ETF (SPY)

On Friday, the SPDR S&P 500 ETF (NYSEARCA:) took a hit, falling 1.8% toward the end of the trading day. The move sent the SPY tantalizingly close to its 50-day moving average.

A test of this mark becomes important now, as we need to see how it reacts when it gets there. Does it result in a spunky bounce or is it met with a tepid rally? Does it hold at all?

We need need answers to these questions so we get can get an idea about sentiment. The 50-day moving average comes into play near $320, which was a notable level of support in December. It’s also the 78.6% retracement from the June low to the recent high.

Falling below that puts the 100-day moving average on the table, and potentially the 61.8% retracement near $310. On a rebound, see if SPY can reclaim the 20-day moving average or if it acts as resistance.

Top Stock Trades for Tomorrow No. 2: Facebook (FB)

Facebook (NASDAQ:) was under pressure Thursday after reporting earnings, and a rally from FANG peer Amazon (NASDAQ:) wasn’t able to generate a sympathy rally, with FB declining again on Friday.

Shares are now below prior resistance between $203 to $205, the 50-day moving average and uptrend support (blue line). That’s not good. If shares lose $200, traders will likely expect a test of the 200-day moving average.

If it can work back up to over $205 then FB needs to reclaim the 50-day moving average.

Top Stock Trades for Tomorrow No. 3: Luckin Coffee (LK)

Luckin Coffee (NASDAQ:) shares tanked on a short report, but have since rebounding significantly from the lows. And no, today’s candle is not a misprint on the chart above.

That said, Luckin did lose the $34 level and the 50-day moving average. This name is even dicier due to it being a Chinese business, which is surely going to be impacted by the coronavirus. For many, this makes LK stock a no-touch and understandably so.

For those looking at it, though, see how it handles $34 and the 50-day moving average. It will be key to see whether Luckin reclaims these marks or finds them to be resistance. If it’s the latter, it puts the $28 to $29 area on watch, which briefly broke on Friday.

Below that and $26 remains a notable level. If LK stock falls below all of these marks, investors may want to see where support comes in before getting long as a trade.

Top Stock Trades for Tomorrow No. 4: Caterpillar (CAT)

Caterpillar (NYSE:) stock hasn’t looked good lately, and Friday’s post-earnings action didn’t help matters.

After shares gapped below $137.50 on Monday, they failed to reclaim this notable area. They have since slipped even lower and on Friday, are losing the 200-day moving average. It seems a little early to call for a decline to $121, but that’s what could be in the cards should CAT remain under pressure.

On the plus side, that would fill the October gap. Moving above the 200-day keeps $137.50 on the table. But for longs, it’s hard to trust CAT below this mark.

Top Stock Trades for Tomorrow No. 5: Nvidia (NVDA)

Nvidia (NASDAQ:) is a pretty straightforward setup, despite the latest bout of volatility.

From here, I would love to see a retest of Monday’s low near $232. There it also has uptrend support (blue line) and the 50-day moving average. A drop to this area gives active bulls a reasonable risk/reward dip-buying spot.

Falling below that signals that more caution may be needed. On a rebound — either from current levels or after a retest of this week’s low — see if NVDA can reclaim the 20-day moving average.

Bret Kenwell is the manager and author of and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long AMZN and NVDA. 

The post appeared first on InvestorPlace.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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