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It was a difficult day on Wall Street on Tuesday, with a very nasty slide in the morning. They did bring back the markets, but still finished lower. I’m not enamored with that rally. I think that there is still a possibility that if we don’t follow through with that rally and rollover, we’re going perhaps substantially lower in the next few days. For now, let’s take a look at some longs and shorts that have been highlighted here.
Advaxis, Inc. (ADXS), a stock that we like, is really looking good suddenly. On the deal with Amgen Inc. (AMGN) on Tuesday, it exploded 2.61 to 11.08, or 31%, on 6.4 million shares. That’s the biggest volume for quite a while. It broke out of a base, through the declining topsline and moving average, in one fell swoop. The near-term target is 12.90-13 range, and the 14 1/2-3/4. It has 12.9 days to cover.
Xencor, Inc. (XNCR) looks really good. Going back to Nov of last year, this stock based, broke out, popped, coiled, and on Tuesday it was down slightly, but moved up couple of points in after hours. I think this stock may have a shot at getting into the mid 20’s. It has 5.35 days to cover.
Stocks on the Short Side…
L Brands, Inc. (LB) worked out very well for us back in March-April, then dropped about 25 points in a four-week period, formed a 3-wave corrective ID, moved to resistance, and is now waiting for the next leg down that could conceivably take this into the low-to-mid 50’s.
Red Robin Gourmet Burgers Inc. (RRGB) got hit on Tuesday for another 2.08 to 46.36, or 4%, on 200,100 shares traded. It’s right on support and seems like it’s going to crack. I’m looking for a test of 40.
Stocks on the long side included Advaxis, Inc. (ADXS), Amkor Technology, Inc. (AMKR), Avon Products Inc. (AVP), BioTelemetry, Inc. (BEAT), Etsy, Inc. (ETSY), Mallinckrodt Public Limited Company (MNK), SodaStream International Ltd. (SODA), Shutterstock, Inc. (SSTK), Teladoc, Inc. (TDOC), and Xencor, Inc. (XNCR).
On the short side, stocks included Cray Inc. (CRAY), Foot Locker, Inc. (FL), L Brands, Inc. (LB), Royal Caribbean Cruises Ltd. (RCL), Red Robin Gourmet Burgers Inc. (RRGB), Signet Jewelers Limited (SIG), Stamps.com Inc. (STMP), and Western Gas Partners LP (WES).
Days to cover is the amount of short interest divided by the company's average daily share volume. In other words, the number of days required to close out all the short positions. A higher number means more potential fuel to a stock’s rally as shorts cover, and thus accelerate the move, when the stock’s price rises.
On Balance Volume (OBV), developed by Joe Granville, is a running summation of volume on up-days minus volume on down days. OBV rises when volume on up days outpaces volume on down days -- and falls when volume on down days is stronger. A rising OBV reflects positive volume pressure that can lead to higher prices. Conversely, falling OBV reflects negative volume pressure that can foreshadow lower prices.