Friday was another strong day, with stocks melting higher. It sets up an interesting dynamic with a Federal Reserve statement coming out next Wednesday. As it stands though, the S&P 500 continues to trade well and push through a notable level near 2,800. Let’s look at our top stock trades to watch for Monday.
Top Stock Trades for Tomorrow #1: Adobe Systems
Shares of Adobe Systems (NASDAQ:ADBE) fell after reporting earnings on Thursday after the close. While full-year guidance was okay, management’s outlook for next quarter came up a little short. In a way, that reminds me of Salesforce (NYSE:CRM), which had a similar report.
So what now?
Like CRM, bulls may feel comfortable enough to gobble up Adobe on this result. However, below $250 and concerns will start to elevate. Not only are both the 50-day and 200-day moving averages near this mark, but the 61.8% Fibonacci retracement from the December lows to the October highs is here too.
If ADBE closes below $250, it will be in no man’s land. In that sense, longs might find the stock to have an attractive risk/reward. If Adobe can get back over the 20-day average, look for it to fill the gap up through $265.
Top Stock Trades for Tomorrow #2: Apple
Speaking of gaps, Apple (NASDAQ:AAPL) filled its gap from back in November today. That came after the stock powerfully stormed through the $185 level and is now threatening to run to the 200-day moving average.
The gap fill was our target in Apple earlier this week, while a move to the 200-day is our second target. That’s a good reason to trail up stops and consider locking in some profits. Apple stock is overbought according to the RSI and no one’s ever gone broke by locking in a gain.
Top Stock Trades for Tomorrow #3: Aurora Cannabis
After a monster move on Wednesday, Aurora Cannabis (NYSE:ACB) had an inside day on Thursday, setting up for the possibility of a rally on Friday. That’s what we flagged on Friday morning before the move.
There was plenty of time to get in this one below $9 and those that haven’t may want to take a pass at this point. $10 is not an unrealistic target at this point, although that’s only 41 cents short of current prices.
Longs should trail up stops and keep other cannabis stocks in mind. For instance, while Canopy Growth (NYSE:CGC) is putting together a super tight coiling pattern, investors of both CGC and ACB need to remember that Tilray (NASDAQ:TLRY) will report earnings on Monday.
Top Stock Trades for Tomorrow #4: Ulta Beauty
Ulta Beauty (NYSE:ULTA) is putting together a strong post-earnings rally on Friday, up 9% after beating on top and bottom lines. The rally is stunning, particularly given the modest rally we were seeing this morning.
In any regard, I will be watching this on Monday, where investors should look for a flat or weak open. If that’s the case and Ulta quickly goes green, it may want more upside and we can have a limited-risk setup by using the morning’s low (assuming it’s within reason). If so, perhaps we can some follow through like we did with Costco (NASDAQ:COST).
Top Stock Trades for Tomorrow #5: Tesla
Investors aren’t buying the Model Y hype from Tesla (NASDAQ:TSLA). Friday’s decline means Tesla stock remains trapped in a nasty downtrend that isn’t over yet.
The 20-day moving average stopped Tesla dead in its tracks on Thursday, although the Model Y unveil is certainly the issue on Friday, not the moving average. If the stock takes out this month’s lows, look for a test of channel support, likely near $265.
If Tesla continues to fall, it may have a date with $250.