Market panic sell-off on Wednesday (05/17/2017) was a bit irrational and over done due to concerns over the future of Trump's agenda only to bounce back on Thursday and Friday. The international growth this year in addition to the economic policies in Europe and the US are currently set up in such a way that it's going take something major for market to reverse it's course.
Smart money tends to agree with that notion as Appaloosa's David Tepper had this to say in March 2017.
"Listen, it's hard to go short when you still have the drugs being given,"
For the market to start giving away some of it's gain, It would had to be something that would prevent the President and Republican controlled house and senate to pursue their pro business agenda. Perhaps Impeachment? seems extremely unlikely to pull off.
Market will very likely continue it's trend upwards if pro business agenda get accomplished this year.
Trade Idea Recap
NCR - NCR Corporation: I've been short this stock since April 21st 2017 when Elasticity first turned negative by 8%. I was close to getting stopped out but wanted to let the trade play out of a bit. NCR currently trades at low $39 and I'm looking to cover some at $38 and the remaining at $35 if it can get there with stop now at $40 to preserve profit.
SIMO - Silicon Motion Technology Corporation: Still holding long swing position from $50. Wednesday sell-off didn't shake me out and I still think $54 is possible. Will hold until it starts to go against me.
XENT - Intersect ENT, Inc. : Still holding it's uptrend and $22 is holding nicely. I'll be looking for an entry next week with the similar plan as before.
EPZM - Epizyme, Inc. : Gave a really nice dip buying opportunity at low $14 and I missed it completely. Lot of people got shaken out most likely as stop losses were hit on the pull back on Thursday. Still on track to break $18 and test $20.
CNCE - Concert Pharmaceuticals, Inc. : CNCE slid late last week due to hold put by FDA on their hair loss clinical trial. I didn't see that coming nor could have anticipated it but always a possibility with Bio-Tech stocks. Despite that the sell off wasn't that brutal and Elasticity has remained positive. CNCE may get a relief rally if the hold gets lifted after they submit additional info to FDA. $13 seems to be a strong support here, if that holds I'll be taking a small starter swing position next week.
Two Low Float Swing Ideas in Tech
The Technology sector has been hot this year rallying more than 16% in 2017 so far. Let's look at two ideas in Tech sector (along with Health Tech) that will make big moves in 2017 primarily due to the story and sentiment in addition to getting amplified due to it's low float i.e. less than 10 million shares available for trading.
A word of caution - Low float stocks will very likely make wild moves so you have to be very careful with your position sizing and never sit on a winner for a long time and be quick to take profit.
ASUR - Asure Software Inc
Fundamentally, ASUR reported strong earnings and increased their full year guidance. Management believes that migrating their clients over to the cloud would result in long term success and has issued a bullish guidance for 2017.
As we look to the rest of this year, Q2 has already seen a continuation of our success in Q1, which gives us confidence to increase our guidance for 2017
Smart money has been loading up on this stock heavily after the earnings based on the SEC 13F‑HR filings despite the price decline which suggest it's in a profit taking zone. In addition to that short interest has been declining in the past month and is currently at low 3%.
Technically, ASUR has been in a strong uptrend for the past couple of years and most recently ran from $10 to $15 in few weeks. Stock currently is in a profit taking zone as mentioned earlier and will likely consolidate here in the $12 area. Elasticity is strong and high flux for it's category means a $1+ intraday range.
I'll be looking to start a position around low $12 area if it can get down there and will size my position accordingly using $10 as a risk or when Elasticity turns negative and sustains. Stock has a good chance of going to $15 before Q2 and to $20 this year if they keep beating estimates.
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COOL- PolarityTE, Inc.
From a fundamental standpoint, PolarityTE is in a hot space of healthcare and software. There is a big and growing market for Skin and bone regenerative medicine. Couple that with legendary small cap Bio Tech investor Dr. Philip Frost and recent insider buying activity and the prospects looks even rosier.
PolarityTE is strengthening it's team by most recently appointing prominent individual such as Dr. Stephen Milner as Chief Clinical Officer. With that strong of a roster no one is betting against Polarity and short interest is relatively low < 10%.
What's concerning to me is the recent selling by smart money for all the month of May according to the SEC 13F‑HR filing. Not just taking profit but closing out positions completely. I wouldn't oversize my position as they may know something we don't.
Technically, chart looks great and suggests that COOL is coming out of the consolidation phase. It can either continue with the momentum up next week or clawback for a Cup & Handle formation before the next leg up. Next possible targets are $15 and $18 and $10 should be used as risk guidance.
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That's it for now folks. Happy and Profitable trading for next week.
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