As I mentioned last week about money flowing into BioTech sector and testing it's recent high, IBB/LABU showed strength on back of positive results from key drug makers. Similarly, SPY continues to show strength and seems on track to test $250 this year. With the markets still on a bullish trajectory, let's looking at 5 ideas to swing trade next week.
Before we dive into ideas, let's quickly look at the trades I opened/close last week.
NTNX: Scaled out and closed my long position last week. May go higher though.
MU: Closed out my position at $32 from $29 entry.
HAIN : Lost this $33 strike bearish bet (put option) as activist investor intervened after earnings and options expired worthless.
EIGR: Took a starter position mid $9 last week. I may close out or trim the position this week as ER is scheduled for next week.
NVGS: Opened position early last week and added to it. New average $10.30.
PTGX: Opened position early last week and added to it. New average high $12. Analyst upgraded late last week.
SNAP: still holding short from $18. Could have added at $15 but didn't. Looking to cover at $13 area. Lowered my stop to $16.
PSTG: Added to the existing position. Looking to take profit at $15.
TGTX: Holding from $10. Still looking for $15.
5 Ideas for Next week
MNRO - Monro Muffler Brake, Inc.
It's been an amazing past three trading sessions for MNRO investors. Stock has gained 15%+ on the back of a solid earnings beating street expectation. Most recently, analysts have reiterated price targets of $60 - $70 but we shouldn't take this into consideration solely.
Elasticity has finally turned positive after 4 months. What we want to do next is watch for Elasticity to sustain for an entry on the long side. If the momentum/demand continues next week $50 break is imminent and next target is $54 in few weeks followed by a trace back to $60 in coming months.
If there is a pullback next week then $44- $46 is a good area to accumulate using $42 as risk guidance.
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SYNT - Syntel, Inc.
Another earnings winner beating streets expectation and clearing out the near term resistance of $19. I would had loved to see the new CEO, Rakesh Khanna raise the 2017 guidance but that didn't happened and he took a conservative stand although he did state that the demand of digital service remained high. SYNT used to be a $50 stock last year but it issued a one time $15 dividend and the timing wasn't good as it was announced when revenue stumbled. You can read about that in detail here.
Chart is forming a multiple bottom pattern on the daily. I'd like to see SYNT hold $19 and base around that level before taking off to $23 which is the next resistance and profit target. Risk would be below $17 area.
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RXDX - Ignyta, Inc.
RXDX is a pre-revenue biotech company which recovered very nicely last two months after knocking down investors with a one-two punch by first announcing disappointing earnings followed by a secondary offering of common stocks a day later in May. Despite all that price has recovered from $6 and it's coming off a recent high of $11. Company has money to survive for 3 or more quarters and has 3 drugs in the pipeline. Company has 0 revenue so they're going to rely on stock offering to continue their operations. I wouldn't be looking at this as a long term investment unless I do my full due diligence and understand the impact their drug can have in the market.
It is very unlikely that I'll be holding this through earnings (08/01/2017 unconfirmed) if I take a position. Most recently it made a nice move off high $8 mark on Friday. I'll be looking for an entry around $9 next week with a target of $10+ before earnings.
RVNC - Revance Therapeutics, Inc.
Fridays (07/21) price action got me interested in RVNC and the technicals are interesting. Stock has been in an uptrend continuation channel for the past 4 months or so on the daily. Right now it's at the bottom of the channel and bouncing off of that trend line.
Revance Therapeutics is scheduled to discuss earnings result in two weeks time. My anticipation is that price could run up by $2 - $3 before earnings. If I enter this trade, I plan to use $22 as my risk. Another reason why price could move up quickly is because of the 22%+ short interest as I expect most people to cover their short from 28 bucks next week.
ACAD - ACADIA Pharmaceuticals Inc.
Another BioTech that's reporting Earnings in the first week of August. The daily price movement for the last week has been pretty strong for ACAD which is what got this in my radar along with the positive elasticity reversal.
I like the long term prospect of ACAD as they are working towards increasing revenue and they have no competition in their niche. I think the stock is worth $33 - $35 given the parameters now.
Depending on how this behaves early next week, I may take a long term position which I'll hold through earnings and for another 6 months or so and a short term position to close before earnings. Institutional holdings is up for Q1 2017 and a positive Q2 earnings result will only amplify accumulation.
I'd like to see $30 hold early next week to take a starter position using $27 as risk. Remember to be flexible with this stock because it has an average Flux score of 4 which means this will move 4% - 7% intraday.
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Finally, here are some more ideas that I didn't have time to study/research but had similar patterns.
- AMBC - Ambac Financial Group, Inc.
- COF - Capital One Financial Corporation
That's it for now folks. I hope you found this blog post informational. Happy and profitable trading for next week.
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Additional Disclosure: I may or may not take positions in aforementioned securities in the future and this article isn't a solicitation to buy either of these securities but strictly for educational/entertainment purpose only. I or BuySellShortCover assume no responsibility if readers plan to buy any of the aforementioned securities. Readers bear responsibility for his/her own investment decision. Stock trading/investment can cause loss in capital and you should always consult a professional financial advisor. This article is an independent research/analysis on ideas generated by BuySellShortCover platform and not a paid promotion by any means.