Quad witching day, one of four each year, pulled the rug out from under a lot of traders on Friday. On Thursday we warned about the potential headaches it would cause and we’re seeing it play out today. Let’s look at a few top stock trades for next week.
Top Stock Trades for Tomorrow No. 1: Apple (AAPL)
Apple (NASDAQ:AAPL) shares turned lower on the day after the company announced it would close its retail locations in several states getting hit the hardest by the novel coronavirus.
This created a ripple effect — as we’ll discuss in a moment — as Apple was one of the first retailers to close down earlier this year due to Covid-19.
Look, this stock has been very resilient, pushing through its prior highs earlier this month and racing all the way over $350. Shares could not sustain above the 123.6% extension from the March low to the February high, which came into play at $353.31.
Now, pulling back, I want to see if uptrend support (blue line) holds as support. Falling below that puts the 20-day moving average in play. A dip below that puts the $325 breakout level on the table.
Top Stock Trades for Tomorrow No. 2: Simon Property Group (SPG)
Now let’s talk about Apple’s ripple effect, as shares of Simon Property Group (NYSE:SPG) take it on the chin on Friday.
Shares are breaking below $70 support and the 20-day moving average on Friday, after losing uptrend support (blue line) on Thursday. This is telling price action for traders, as they now look to see if the 50-day moving average can act as support.
Below the 50-day puts sub-$60 levels in play with no real support on the table until shares start to firm up and show us where buyers are willing to buy SPG. $50 is a far-off but possible downside target if the selling accelerates.
On the upside, see if Simon Property stock can reclaim $70 and the 20-day moving average. Climbing above that puts $80 to $85 back in play, but let’s go one step at a time.
Top Stock Trades for Tomorrow No. 3: Royal Caribbean (RCL)
Negative news this week in the cruise industry didn’t do Royal Caribbean (NYSE:RCL) any favors, but neither did the news from Apple.
Shares are breaking below the 20-day moving average on the day, down almost 7% as of this writing. RCL stock is also losing the $55 to $56 area. While not vital necessarily, it has proven significant over the past few weeks.
On a deeper decline, see if the $48 to $50 area acts as support. Moving below that puts the 50-day moving average and uptrend support in play, along with the 23.6% retracement at $46.33. I would consider this a key area and a zone where bulls should (theoretically at least) want to buy RCL stock.
Falling below that puts sub-$40 in play and would be concerning price action in the short term.
On the upside, see if RCL stock can reclaim the 20-day moving average. Above that puts $65 to $68 in play, followed by a possible retest of $75. Let’s see where support comes into play before we get too gutsy. Remember, RCL rallied almost 300% from the lows.
Top Stock Trades for Tomorrow No. 4: Alpha Pro Tech (APT)
After a month-long lull, Alpha Pro Tech (NYSEAMERICAN:APT) is finally back with some momentum. Shares are up more than 75% from this month’s low and almost 35% from this week’s low.
The latter is mostly fueled by Thursday’s roughly 15% gain. After reclaiming the 20-day and 50-day moving averages, shares are rallying into resistance near $16 to $17.50. If it can clear this zone, $20-plus is possible.
On a dip, see if the 20-day and 50-day moving averages hold as support. If they fail, it will mean APT stock also lost uptrend support (blue line). Below $12 and the $9 to $10 zone is possible. This is a wild mover, so check your discipline before stepping in.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long AAPL.