Despite few key companies fell after earnings last week (FB, AAPL, TSLA) market continued it's uptrend on the back of the solid job growth report. In addition to that, GOP version of the health care bill narrowly passed House which further solidifies Trumps ability to deliver on his promises but faces skepticism in Senate as democrats and few republicans are unhappy with the legislation. When market is in such a bullish uptrend as it has been post election, its more appropriate to join the bull ride than to be going against it while it lasts.
For next week, French election is going to have an impact on the markets as we prepare for a surprise Le Pen victory given the recent events last week such as opponent candidate Emmanuel Macron's campaign being targeted for a massive computer hack.
Trade Idea Recap
Let's look at few ideas from last week that I thought were good candidate to go long.
SIMO - Silicon Motion Technology Corporation : As expected SIMO broke $50 and held it quite nicely. I took a swing position at mid $49. Next targets is $54.
ZEUS - Olympic Steel, Inc. : I was expecting $22 to hold last week for the next leg up to $24 and $26. On Monday I took a long position at high $22s on the pullback and I was proven wrong the very next day and got stopped out of my position. Stock now trades at $19.
BBW - Build-A-Bear Workshop, Inc. : Targets were $12 and $13 and BBW is currently holding $11 nicely.
Also on the list were COWN (retraced to $15) and CHUY which missed earnings and got taken to the cleaners. No position on these.
Seven long ideas for next week
For next week we're going to source ideas from prospecting engine for stocks with positive Elasticity reversal that are priced between $10 and $50. We will be watching these stocks next week for reversal trend continuation along with the broader market bullish momentum to continue.
If you're reading this article for the first time and wondering what's Elasticity then please take a moment to checkout our howitworks page.
Now let's take a look a deeper look at these seven ideas that we will be watching as potential long reversal trend continuation for next week.
CTLT - Catalent, Inc.
CTLT rose more than 20% on earnings beat last Friday. Stock is currently at it's all time high and in a profit taking zone so lot of investors and traders took full advantage as you can see price dropped by $4 from days high intraday. If the strong demand continues, we may very well see another $34 test next week.
CPSI - Computer Programs and Systems, Inc.
Few weeks ago, CPSI was a potential short play as Elasticity had turned negative along with a very high short interest on the stock. However, negative Elasticity didn't sustain and it was off our radar. Surprisingly it beat earnings by posting 1Q profit. Given the very high short interest in this stock, we might as well see a squeeze in the making if bulls continue to take control and push this stock to it's next stop of $37 for a gap fill.
SHAK - Shake Shack, Inc.
Despite a very high short interest (> 50%), SHAK beat analyst estimate and now all of a sudden it's a growth play. Chart shows a strong Berserker spike along with high % Elasticity reversal so $37.50 test seems very likely in the coming weeks as shorts may start to trim their position. Long term I'm not so bullish on the stock but rather looking to join the short term play.
FORM - FormFactor, Inc.
Another earnings winner beating it's own guidance last Thursday and uptrend continued into Friday where the stock closed low $14. $17 and $20 are next stops if demand continues but it will take time. Elasticity remains positive and is increasing day over day after the initial Berserker pop which suggests there is more upside to come.
TWI - Titan International, Inc.
Another growth play despite the earnings miss and reporting 1Q loss on Thursday. Chart is currently showing indecision on the daily but Elasticity remains positive. TWI needs to clear $12 on strong demand if it were to test $14 in coming weeks.
GPRE - Green Plains, Inc.
After reporting earnings early last week and falling short on street expectation investors see GPRE as a strong growth play as revenue has increased across all segment of it's business compared to same quarter last year. From a technical perspective, it's been trading on a side way channel for the past few months and if it breaks $26 then $28 and $30 are next stops.
AVD - American Vanguard Corporation
AVD reported earnings last week beating analyst estimate and if $17.50 holds next week then we can see $18.50 and $19.50 in coming weeks.
That's it for now folks. Happy and Profitable trading for next week.
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