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The markets had a very unusual day on Wednesday, first down and looking ugly, and then a nice recovery after the FOMC. We’re not out of the woods yet, and we did snapback after breaking down to resistance. The next day or two is going to be very important. A lot of stocks we trade and swing have done very well, even in this environment. Let’s take a look at some of them.
Swing Trade, Amkor Technology, Inc. (AMKR), is doing great, up 45 cents to 9.36, or 5%, on 3.8 million shares on Wednesday. I gave it to you in the 7 range, and it’s now at 9 1/2. My targets were 9 and 10. It’s pretty much at those targets already. The short-term trend has a possibility of reaching as high as 10 at the high from a year and a half ago, but I believe, at this point, this stock could get to the top of the channel. There’s a longer-term resistance coming in at the all-time high from 2014 that comes up to about 12. Right now my targets are 10 and 12, if it extends. It has gone 50% in a week so you have to be careful, but it has good momentum, and 5.67 days to cover.
Clayton Williams Energy, Inc. (CWEI) had another fantastic move on Wednesday, up 5.46 to 67.25, or 8.8%, on 793,622 shares traded. It’s 5 waves up and what a blow off it’s having. It the last 6-7 days it’s gone from 33.90 to Wednesday’s high at 67.45. A triple top comes in up here between 71-73, and may very well get tested on Thursday. It needs to consolidate, pullback, and retest. Any pullback to the 50-55 range would not surprise me. There are 5.9 days to cover.
Medivation, Inc. (MDVN) had a nice pop midday Wednesday on the story that Merck is also involved now. So that leaves 6-7 firms in the mix for a takeover now. After stair-stepping its way higher for the last couple weeks, it popped again on Wednesday, up 1.27 to 66.48, or 2%, on 2.5 million shares. I suspect it will reach 75-80 on the takeover.
Stamps.com Inc. (STMP) just keeps dropping, down another 27 cents to 87.15 on Wednesday. The latest of rising wedges tells me, that although it’s come up 7 days in a row on very little volume and very poor technicals, It’s right at the moving averages, and declining topsline, and ready to fall apart. First stop at 67, 60, and maybe even as low as 50.
Stocks on the long side included Acacia Communications, Inc. (ACIA), Amkor Technology, Inc. (AMKR), Cemtrex Inc. (CETX), Clean Energy Fuels Corp. (CLNE), Clayton Williams Energy, Inc. (CWEI), Auris Medical Holding AG (EARS), Medivation, Inc. (MDVN), Impinj, Inc. (PI), Teladoc, Inc. (TDOC), Urban Outfitters Inc. (URBN), and Valeant Pharmaceuticals International, Inc. (VRX).
On the short side, stocks included Akamai Technologies, Inc. (AKAM), athenahealth, Inc. (ATHN), Chipotle Mexican Grill, Inc. (CMG), Luxoft Holding, Inc. (LXFT), Stamps.com Inc. (STMP), and Synaptics Inc. (SYNA).
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.