As the technology sector XLK continues to hold it's bullish trend for the year despite the sell-off on Thursday (07/27/2017), I expect the sector to continue to run it's course assuming the highest majority holder in XLK i.e. AAPL which reports on Tuesday next week can beat street estimates.
Let's take a look at six tech ideas to watch for next week. The common theme here is that these stocks are exhibiting bullish signals as they've raised their guidance for the year. These ideas can be easily sourced in BuySellShortCover platform by using the Consecutive Day Elasticity filter along with Positive Reversal. Click here to learn more.
Before we dive into ideas, let's quickly look at trades I opened/close last week.
- SNAP: Covered half of my short from $18. Next week IPO lockup period expires and 400 million shares are eligible to hit the market. Most likely it will continue to trend lower but I like to take some off the table before that event.
Review why I took a short position in SNAP here.
ADMS : Took a starter position at $30 and will hold through earnings. I'll add if there is good news and if we see $31 or $32. Risk is at $27 and I'm targeting $36 to take profit.
SYNT : Took a starter position in low $19. Risk is at $17 and will add as it moves higher and I'll take profit around $23.
You can review full details on these two ideas here.
PSTG: Fully scaled into the position with $12.50 average. Still looking to take profit at $15 so will likely hold through earnings. Review PSTG idea here.
TGTX: Still Holding from $10 and looking for $15. Review why I took a position in TGTX here
PTGX: Average is high $12 as I built a position between $12 and $13.50. Risk is at $11 with $17 as profit target.
NVGS: Average $10.30. Currently in the money. Risk at $9. Target $14.
EIGR: Average $9.40. Will cut this as a loss or sell on spike if I can. I don't like the price action now as Elasticity is in negative territory.
Find rationale on these three ideas here.
Six ideas in Technology
LPSN - LivePerson, Inc.
Despite reporting 2Q loss, LivePerson raised their guidance for 2017 and stock reacted positively although now it's in a profit taking zone. Stock has almost doubled since March but I think there is an opportunity to buy high and sell higher here.
Price is trending nicely in an uptrend continuation channel and we should see some pullback next week. $12 - $13 is accumulation zone with risk below $11. Short term $15 seems possible to me. Smart money has been accumulating since the past two quarter and not a lot of people are betting against this stock to go down.
TDC - Teradata Corporation
Similar to LPSN, TDC enjoyed a nice price lift despite reporting 2Q loss on Thursday 07/27/2017. Company is moving towards a subscription model for it's analytics offering and has raised it's guidance for the second half of 2017.
Based on the technicals and how elasticity has made a major move in the past few days, I see TDC trading around mid $30s in weeks to come. $34 - $36 seems very possible if demand continues next week. I plan to build a position around $30.50 - $31.50 range and use $30 as my risk guide.
DWCH - Datawatch Corporation
DWCH stock price has doubled this year and given how institution money has flown into this stock past two quarters its no surprise why this stock doubled. Although DWCH also benefited from "Big Data" buzz in the industry. I'm cautious about this stock and I think it's worth $10 now but if demand continues and we start to see $11.50 break then $15 isn't impossible. I plan to watch price action next week with the hopes that $11.50 can break to start building a position. If there is a pull back then $9.50 isn't a bad price to take a starter position for a 10% gain in coming weeks.
GIMO - Gigamon Inc.
Although I don't like a chart that gaps all over the place, I see Gigamon at $48 or $50 in few weeks or month if $42 can break and hold next week. Price gapped up nicely after earnings as they beat street expectation by losing less than expected ($.20/share). I'll look to build a position between $37 - $39 and use $36 as my risk. The technical are telling us that money is flowing into the stock given how Berserker score has been over average for the past two trading sessions. Historically when that has happened this stock has moved by $4 - $5 so I expect nothing less this time around.
Finally, here are some more ideas that I didn't have time to study/research but had similar patterns.
- SRT - StarTek, Inc.
- IVAC - Intevac, Inc.
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 an affiliate or paid promotion by any means.