Harry's Charts of the Day videos are available to members on Monday-Thursday evenings, with one video per week available to non-members. Members please login and see Charts of the Day in the "Videos" menu dropdown.
It was a distinctly different market on Tuesday. First it was up sharply in the morning making new all-time highs on the S&P 500, then a nice, solid pullback, 5-wave decline midday, before a late bounce brought them back to close just slightly positive on the day. Nevertheless, we have a lot of stocks that we are watching that are doing very well. Let’s take a look at them.
Ambarella, Inc. (AMBA), a swing trade of ours, is doing well. It had a solid decline from mid-2015 to early 2016, formed a base, broke out, flagged, and ran up in a nice channel. It’s getting up near my target near the Dec high, up around the 64-65 range, which could be reached rather shortly. It was up 1.83 to 61.08, or 3%, on 1.3 million shares. It has 9.24 days to cover.
Callon Petroleum Company (CPE) popped 42 cents to 12.84, or 3.38%, on 6.7 million shares on Tuesday. I have been watching this stock for a very long time. After a crumbling in 2007-8, going from 28 all the way down to under a dollar, it based out over the last several years, then popped, and consolidated for a year and a half. It went up to resistance, held it, continued to hold, formed a 3-month consolidation, and then spiked up in the last six days, going from about 10.34 to 13.25. It may consolidate, but I think the target right now is just under 15, and then 17 and 19 1/2. I put it out as a swing on Tuesday. It may be a little early, but it has momentum. It has 5.2 days to cover, so we may see an extension.
Clayton Williams Energy, Inc. (CWEI) is one of the best acting stocks of ours for this year for a swing trade, having gone from 19 to 54. It did back off late on Tuesday, closing up 1.34 to 51.78, or 2.66%, on 643,168 shares traded. My target was 54-55, and we reached that. It looks to me like it has a very strong pattern. The most recent moves have taken it from a low of 6.35 to 54. That’s huge. If it gets near mid-to-high 60’s that would be a stellar move. This stock has come a long way. It has 4.94 days to cover.
DepoMed Inc. (DEPO) had a nice pop on Tuesday after a pullback, up 26 cents to 21.49, or 1.22%, on 1.15 million shares, but it didn’t hold high. The reason I like it is because of the way the OBV is acting. The wedge that it was in is broken. It’s been up for five days in a row and the pullback held support. I’m going to look for a breakout above Tuesday’s high at 22.02, and a move to 25, or better. It has 11 days to cover.
Stocks on the long side included Advaxis, Inc. (ADXS), Ambarella, Inc. (AMBA), ANI Pharmaceuticals, Inc. (ANIP), Accelerate Diagnostics, Inc. (AXDX), Sotheby's (BID), Bellicum Pharmaceuticals, Inc. (BLCM), The Chemours Company (CC), Callon Petroleum Company (CPE), Castlight Health, Inc. (CSLT), Clayton Williams Energy, Inc. (CWEI), DepoMed Inc. (DEPO), Gigamon Inc. (GIMO), Horizon Pharma plc (HZNP), INSYS Therapeutics, Inc. (INSY), Inphi Corporation (IPHI), MeetMe Inc. (MEET), Nevro Corp. (NVRO), Aratana Therapeutics, Inc. (PETX), Progenics Pharmaceuticals, Inc. (PGNX), Rackspace Hosting, Inc. (RAX), Resolute Energy Corporation (REN), Rapid7, Inc. (RPD), Synergy Pharmaceuticals, Inc. (SGYP), Valeant Pharmaceuticals International, Inc. (VRX), Weibo Corporation (WB), and Yirendai Ltd. (YRD).
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.