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5 Top Stocks to Trade First Thing Monday, Including Roku

Bret Kenwell

Trade optimism (what else?) pushed stocks higher again on Friday, with the S&P 500 shaking off its slight “selloff” from Thursday by rising about 50 basis points to the end week. We also had some massive movers on Friday, thanks to earnings. They are first up on our top stock trades list.

Roku (ROKU)

top stock trades for ROKU earnings
top stock trades for ROKU earnings

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Just this morning we recapped the blowout earnings results from Roku (NASDAQ:ROKU). I never understood why people were tossing this stock out below $40 (and later, below $30 in December) after a beat-and-raise quarter in November. Did they forget that this stock was over $75 in October? Did they forget about the secular shift ROKU is riding?

It doesn’t matter. Another blowout earnings results has this stock surging 24% on Friday and at roughly a 100% gain so far for the year. In the pre-market, this stock was up just 5.5%. The reaction was modest despite the excellent report. Even in morning trade there was plenty of time to jump on this one.

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ROKU stock is squeezing the shorts out, forcing them to run for cover and bidding the price up in the process. The question is, how high can Roku squeeze? $65 to $70 is in the cards now, but for those not long, waiting for Roku to settle down is the best move. Even without a pullback, it needs to consolidate a bit.

IQiyi (IQ)

top stock trades for iqiyi earnings
top stock trades for iqiyi earnings

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IQiyi (NASDAQ:IQ) and Roku are fighting for the top spot, with the former also up impressively on the day. Investors are bidding the stock higher by 20% on the day, as Chinese stocks are suddenly back in favor and everyone wants a piece of “the Netflix (NASDAQ:NFLX) of China.”

Operating losses aside, the growth here is bananas and that’s got investors thinking they really may have found China’s version of Netflix.

This one has been a huge winner for us. After the breakout over $18, we again outlined the stock ahead of earnings. However, our upside target was to the $25 area, near its 200-day moving average. Shares ripped through that spot but have pulled back off $28. Part of that backing off may have come from some late-day trade talk.

Either way, this has become a buy-the-dips candidate once again. Like Roku though, we need to let it settle down.

Stamps.com (STMP)

top stock trades for STMP
top stock trades for STMP

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Plunging more than 55%, it wasn’t a good day for Stamps.com (NASDAQ:STMP) after it ended its partnership with the United States Postal Service. The move thrust the stock below $100 a share and straight into no man’s land.

Maybe $80 holds up as support and maybe not. If we do get a pop in STMP, I want to see if it can get over $100. If not, this becomes a resistance level. However, this one will likely be too volatile for me to touch.

Why’s it on the list then? To warn investors to be careful and know that bottoming is a process. A one-day 55% lopping is not indicative of an easy trading scenario, so proceed with caution.

Zillow (ZG)

top stock trades for Z earnings
top stock trades for Z earnings

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Surging 23% on the day and Zillow (NASDAQ:ZG, NASDAQ:Z) is looking to outpace Roku and iQiyi for Friday’s top gains. With its move over $37.50 and now over $42, Z is looking pretty good. It needed a big earnings report and it got it on Thursday after the close.

Like Roku and IQ, it’s on the buy-the-dips list, and probably should have been bought on Thursday as it pulled back to uptrend support into earnings. But the risks are high for those types of traders. I would like to see Z consolidate for a few days below the 200-day moving average.

That will increase the odds it can push through and perhaps challenge the $47 to $50 area. Above that and Z may even be able to fill the gap up to $58. On the downside, I don’t want to see Zillow below $40.

The Trade Desk (TTD)

top stock trades for TTD
top stock trades for TTD

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What an incredibly bullish list, huh? The cherry on top is The Trade Desk (NASDAQ:TTD). I might have gotten my Christmas Eve fill in Roku, but I missed TTD by about $2. It’s since doubled from my $100 unfilled order — that’s an investor’s life though!

In any regard, this stud is off to the races up 31% on the day. I doubt we see it back down to $160, but if we do get it down there — perhaps on some negative trade talks or a sizable market pullback — it would be foolish to ignore TTD down there. Give this one a few days to digest (sick of hearing that yet?) and it will set up better on the long side.

There’s a reason InvestorPlace’s Luke Lango named this one a top stock to buy for long-term gains. Just up 42% since that call, NBD.

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

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