The markets got off to a hot start on Friday but couldn’t maintain momentum as the headlines continued to batter sentiment. Plus, who wants to go long into a weekend that’s full of uncertainty? Let’s look at a few top stock trades for next week.
Advanced Micro Devices
I’m quite conflicted as I look at the chart of Advanced Micro Devices (NASDAQ:AMD). On the one hand, the stock is down around 40% when it trades near $100, and it’s a great company.
On the other hand, the rallies from this zone continue to weaken, while AMD is struggling to reclaim the weekly VWAP measure and declining 10-week moving average. Further, it’s failing to recover the 200-day and 50-week moving averages as well.
So far, buying at or near $100 has been rewarding for the longs, but I question how long that will continue — as painful as it is for me to admit. I’m a bull at heart and a bull on technology stocks at that. However, we must not lose sight of the market environment.
If AMD stock loses the $100 area and fails to reclaim it, we could be looking at a potential move toward $90. If the stock really gets hammered, $75 could be on the table.
On the upside, a move over the 50-week and this week’s high of $111.71 opens the door to the declining 10-week moving average and the $120 area. Over this area puts $130-plus in play.
The EV stocks have been getting killed, but Tesla (NASDAQ:TSLA) has been holding up the best. However, its failure to hold the 200-day is being noted, while the 21-day has been active resistance and is not lost on those observing the name without bias.
We looked at Rivian (NASDAQ:RIVN) yesterday as it continues to grind out new lows. Now we look at Tesla, which is down 5% today and leaning on that $790 area.
If it breaks this area and goes weekly-down next week, it could open the door back down to the 21-month moving average, as well the February low just under $700. We had that level earmarked thanks to the 161.8% downside extension. This time it comes into play near channel support.
On the upside, it’s simple. Tesla must clear the 200-day and 21-day moving averages in order to press higher.
Sticking with the EV theme, Nio (NYSE:NIO) has been getting decimated, thanks in no large part due to the declines in Chinese equities and the bear market in growth stocks. It’s a double-whammy with this one. Now rolling over below the January and February lows with no divergences on the weekly chart gives this one a bad look. If short, my next downside target would be $15 or the 161.8% downside extension.
If Nio stock can’t find its footing there, it’s possible we see a continued melt down toward the $9.40 to $10 zone. It may seems unlikely, but you just never know with a market like this.
On the upside, I’d like to see Nio reclaim the February low. The declining 10-week moving average has been a problem, though.
Last but not least, we have SoFi Technologies (NASDAQ:SOFI). This one gave bulls a great opportunity to jump into the rescue boats and bail on SoFi near $13.
Shares popped on earnings, but ran right into prior support turned resistance, the declining 50-day, the daily VWAP measure and the underside of prior uptrend support (indicated by the blue line).
Despite solid results, this is the trend we’re seeing in growth stocks right now.
Now breaking the February low of $8.82, we again are not seeing any kind of bullish divergence. Like the others, I’m sorry to say that I don’t know where the low is on this one.
Until we get some kind of reversal or upside rotation above active resistance — in this case, active resistance is the 10-day and 21-day moving averages — then it’s hard to look for a sustainable rally.
I’m left wondering, do we see $7.50?
Originally published on InvestorPlace.com
On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.