The market is trying to put together a reversal on Friday, following a gap-down open after an ugly session on Thursday. That said, here’s a look at a few top stock trades for Monday.
Top Stock Trades for Monday No. 1: Nasdaq ETF (QQQ)
Of the major market ETFs, the PowerShares QQQ ETF (NASDAQ:QQQ) looks the best. Admittedly, that’s tough to say with shares down 16.4% from peak to trough in just seven trading sessions.
However, shares are putting in a small bounce off the 200-day moving average — something the SPDR S&P 500 ETF (NYSEARCA:SPY) failed to do — as investors search for direction.
From here, we have multiple levels to consider.
On the upside, let’s see if the QQQ can reclaim the 100-day moving average. If it can, technically speaking, the 50-day moving average is on the table. That would represent a about a 10% rally from Friday’s low. And while it doesn’t seem likely at this point, not many would have bet on a 16% drop in less than two weeks either.
As for the downside, I want to see $195 hold as support. At $190, the QQQ will be down 20% from the highs and at the 50% retracement from the December 2018 lows. Below that puts the $180 to $185 area in play.
Top Stock Trades for Monday No. 2: Amazon (AMZN)
Amazon (NASDAQ:AMZN) hasn’t been immune to the selloff either. Shares could not push through $2,175 despite multiple efforts earlier this month. However, the stock was acting much more bullishly since reporting earnings in January.
Those gains are now gone, with AMZN filling its January gap on Friday. And despite the stock’s rebound from Friday’s lows, AMZN is having trouble gaining traction over the 200-day moving average.
If Amazon can’t reclaim the 200-day, a test of the $1,780 to $1,800 level may be in order. If it can reclaim it, though, the 50-day moving average is possible. However, should the selling pressure keeps up over the next few weeks (or at this rate, days), then $1,700 is not technically out of the question.
Top Stock Trades for Monday No. 3: Trade Desk (TTD)
One of Friday’s few winners, Trade Desk (NASDAQ:TTD) spent the first half of the trading session higher by about 10%. The move comes after robust fourth-quarter earnings and solid guidance.
Thursday’s bounce off the 200-day moving average looks even better now, although, TTD is struggling with reclaiming its 50-day moving average.
Remember, this stock penetrated $320 just a few sessions ago and reported strong earnings on Thursday. Yet, because of the market-wide selling, TTD is not out of the woods.
Over the 50-day puts $290 in play. Above that, and $300-plus is possible. If it can’t reclaim the 50-day moving average and $290, though, then a retest of the 100-day and 200-day moving averages may be in store. Moreover, below $240 could trigger more selling.
I don’t think TTD sees $180 again, but if it does, it’s a long-term buy in my book.
Top Stock Trades for Monday No. 4: Alteryx (AYX)
When markets go haywire, I like to look for relative strength. While Alteryx (NYSE:AYX) has not been bombarding its way higher, it’s been holding up pretty well. Plus, the company just reported a monstrous earnings result earlier this month.
Shares are now caught between $125 and the 50-day moving average on the downside, and $140 and the 20-day moving average on the upside. A break of either may create a continuation trade in that direction.
If support breaks, look for a drop down to the 200-day moving average, currently near $114. Should the $145 resistance give way, however, see if AYX can clear it.
If AYX continues to outperform the market — up about 3% on Friday vs. a 2.7% decline in the SPY — then this will be a go-to name for me when the market turns more bullish. Stocks that hold up the best during the downfall usually perform well once buyers come back into the market.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long TTD and AYX.