While the markets got bogged down by dismal retailers earnings last week, SPY continues to trade within the range of high $230s. For next week, we will likely continue to see sideways actions provided we don't break above or below either of the ranges ($240 or $236).
Trade Idea Recap
Let's look at few ideas from last week that I thought were good candidate to go long.
CTLT - Catalent, Inc. : I was expecting $34 to hit last week but looks like the stock needs more time. However, the uptrend is still strong and it closed out $32 netting +$2 last week.
CPSI - Computer Programs and Systems, Inc. : I expected a squeeze and $37 in few weeks and that still seems highly probable as demand continues with bulls in full control now. Stock close in low $33 netting +$3 last week.
SHAK - Shake Shack, Inc. : As a short term play I was expecting SHAK to hit $37.50 last week. Stock went as high as $36.90 netting a sweet +$1.50 last week if the dip was bought on Monday.
TWI and GPRE drifted lower instead of grinding up last week so it's off the radar for now. AVD and FORM are in a sideways consolidation and price action isn't that appealing to me as of now but will still be on watch.
Four Dip Buying Opportunities Next week
Let's take a look at four ideas for next week where we can find opportunities to buy stocks on pullback where they have been running higher on the daily as bullish momentum continues.
Here is a quick illustration of the chart pattern that we are looking to trade. The idea here is to find stocks that have been on a bullish momentum for a while due to a strong catalyst (good earnings or positive news) but the stock is currently taking a break before it moves higher.
Let's head over to our prospecting engine and craft a scenario that closely resembles this chart pattern. Here are the list of filters that I've applied -
- Types : Just US Equities
- Price : Min $8
- MinAvg Volume : 100K
- Days Elasticity : 30 days + Positive
- Flux : Min 4
- Chg5/Chg3 : Max 0
- Chg2 : Min 0
- Chg1 : Min - 5 or 0
Few key filters here are Days Elasticity set to positive and minimum is set to 30. This filter will show us stock that have been grinding higher.
The second important filter are 5 day and 3 day % change that are capped at 0. This finds us stock that have recently pulled back and haven't closed positive in the past 3 to 5 days.
Finally, we set the 1 and 2 day % change to be positive at minimum which will show us stocks that are either going sides ways or started to curl up slowly.
note : the screenshot here only shows 2 stocks but I've used few different dates in past week to find two other ideas
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.
XENT - Intersect ENT, Inc.
Earnings winner currently in a consolidation phase now. Use high $21 as your guide for risk. Bulls are in full control here and dips are getting bought aggressively. Elasticity is very strong and demand is increasing! If $22 holds $25 and $29 are next stops.
MX - MagnaChip Semiconductor Corporation
Another earnings winner currently trading sideways for couple days after the initial pullback. Charts shows indecision in the past two days so I'll be looking to see if $9 holds with an initial target of $10 next week and then $11 which is a major resistance and profit taking area.
EPZM - Epizyme, Inc.
Despite the double top chart formation, EPZM is making a nice higher lows on daily and Elasticity is still positive and moving away from 0 which is a positive sign. Even though company reported loss in 1Q it was better than expected. $18 and $20 are next target respectively if $15 can hold next week but I would wait for confirmation of $16 break with a strong demand before taking a position.
CNCE - Concert Pharmaceuticals, Inc.
CNCE has been trading in the range of $14 - $18 range for the past two months and now it's trying to curl off the lower range. Friday's price movement is hinting that next leg up will likely start next week. I'll be looking to buy anything close to $15 and use $14 as my risk with $17 and $19 as my targets in next few weeks.
That's it for now folks. Happy and Profitable trading for next week.
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