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5 Top Stock Trades for Friday: CELG, SQ, FIT, BOX

Bret Kenwell

It’s another choppy session on Wall Street as investors react to better-than-expected fourth-quarter GDP data and try to interpret continuous trade-deal headlines that keep crossing the wire. All the while, individual stocks continue to put together big-time moves. Let’s look at a few top stock trades to get see which are standing out the most.

Top Stock Trades for Tomorrow #1: Celgene

top stock trades for CELG

Shares of Celgene (NASDAQ:CELG) were under pressure Thursday, after a large investment manager in Bristol-Myers Squibb (NYSE:BMY) expressed disappointment in the buyout deal. While investors are debating about the firm’s voting power, it’s still dampening the mood around the $74 billion deal.

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Thanks to the headlines, it’s left Celgene to fall almost 8% to just under $84. The action is quite disappointing for bulls, many of whom are desperately hoping this deal goes through. It’s also disappointing as CELG stock way moving nicely, threatening to push through $92.

Now what?

With the stock’s bounce off the lows, new-money longs have a solid risk/reward setup. The 200-day and 50-day moving averages stepped in as support, so investors who want to use a close below Thursday’s low as their stop-loss are justified in doing so.

Below $80 and CELG stock won’t be looking too hot.


Top Stock Trades for Tomorrow #2: Box

top stock trades for BOX

Box (NYSE:BOX) is also getting smashed on Thursday, down almost 20% after an ill-received earnings report. Box is my smallest portfolio position and while I’m disappointed in the move, I still like the stock over the long term.

That said, this is the Top Stock Trades column, not the Solid Company but Weak Charts column. The situation is simple: the charts look bad for Box.

The resiliency was astounding, with Box running from $20 at the start of this month to almost $25 ahead of the print. It’s doing a good job of rallying off Thursday’s lows, and north of $20 is encouraging. But still below the 50-day and this moving average could act as a clear hindrance to the bulls.

Over this level and Box could run to $21, near downtrend resistance. Bears could either go short and use the 50-day (or downtrend resistance) as their stop-loss, or wait for a break below Thursday’s lows to go short. Conversely, daring bulls who go long Box now could use the Thursday lows as their stop-loss, though it is admittedly a bit far from current prices.

Both sides could give Box a day or two to digest the move.


Top Stock Trades for Tomorrow #3: Square

top stock trades for SQ

Square (NYSE:SQ) is a bit less extreme, but the bulls came to play. After selling off on SQ’s fourth-quarter earnings, the chart is setting up nicely. With Thursday’s bullish engulfing candle — notice how the low-high range completely “engulfs” the prior day’s range — even more upside could be on the way.

As great looking of a chart as this is, I actually do not love the action in SQ stock. Not because the reward isn’t tempting enough, but because the risk is so exaggerated. Simply put, where does one put their stop-loss?

At the prior day’s close? How about at Thursday’s lows?

Ordinarily I would say the latter, but that’s a long ways away from here and a bit too much risk for me. This one has upside potential, but bulls need to be careful and disciplined.


Top Stock Trades for Tomorrow #4: JD.com

top stock trades for JD

With JD.com (NASDAQ:JD) rallying to the 200-day moving average and pulling back after reporting earnings, I would love to see it consolidate between today’s high and $26.

This would give the stock a nice “handle” to accompany this big “cup” formation we have here — hence the “cup and handle” formation. Then powering through the 200-day could trigger a big-time breakout. Below the 21-day is cause for concern, though.


Top Stock Trades for Tomorrow #5: Fitbit

top stock trades for FIT

I am not a big fan of Fitbit (NYSE:FIT) as the stock is too volatile for my liking. That said, bulls have a decent risk/reward setup on their hands after the stock’s 14% post-earnings bludgeoning on Thursday.

Investors who go long can use the 200-day moving average as their stop-loss, while investors comfortable with a wider trading range can consider using Thursday’s low.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long BOX and CELG. 

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