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The markets had a difficult day on Thursday, but some of the stocks we follow did well. A lot of low-priced stocks were popping. It’s a bit worrisome, if you ask me. For now, let’s go over some longs and shorts.
Array BioPharma Inc. (ARRY) broke out on Thursday, and looks like a swing trade from here. It did very well, up 59 cents to 4.48, or 9.27%, on 7 million shares. Now I’m looking for a run to the 5 1/4-1/2 range, maybe even 6.00. It has almost 10 days to cover.
Clayton Williams Energy, Inc. (CWEI) made an unbelievable move off the low, having run from 6, and change, to 46, an 8-fold increase just since April. A phenomenal move, and it’s still going. In fact, Thursday was a breakout day, up 4.10 to 43.94, or 10.6%, on 4.1 million shares. You can see how it moved across resistance. It may very test the next level that comes in around 55, and then I’m looking for much higher. It has nearly 5 days to cover.
Energy Recovery, Inc. (ERII) had a very nice move on Thursday, up 7.37 to 11.30, or 2%, on 1.5 million shares. We put a swing back on it. It’s had two swing on it previously that worked well for us. It looks great for going forward. Look for a test of the prior high at 13.30, and beyond that, this stock could run to 17-18. It has 5.9 days to cover.
Exelixis, Inc. (EXEL), one of our favorites, exploded 1.68 to 11.07, or 17.25%, on 22.6 million shares, on good news. It’s very likely we could get some consolidation here, but I think it going to run up to 12 1/2, eventually 15-16, and possibly 19, on an intermediate basis. It has 7 days to cover.
Stocks on the long side included Acacia Communications, Inc. (ACIA), Alarm.com Holdings, Inc. (ALRM), ANI Pharmaceuticals, Inc. (ANIP), Array BioPharma Inc. (ARRY), AxoGen, Inc. (AXGN), Cott Corporation (COT), Clayton Williams Energy, Inc. (CWEI), Eleven Biotherapeutics, Inc. (EBIO), Energy Recovery, Inc. (ERII), Exelixis, Inc. (EXEL), Fitbit Inc. (FIT), Five9, Inc. (FIVN), GoDaddy Inc. (GDDY), GOL Linhas AÃ©reas Inteligentes S.A. (GOL), MagnaChip Semiconductor Corporation (MX), NanoString Technologies, Inc. (NSTG), NVIDIA Corporation (NVDA), Pacira Pharmaceuticals, Inc. (PCRX), Insulet Corporation (PODD), Tower Semiconductor Ltd. (TSEM), Ubiquiti Networks, Inc. (UBNT), Weibo Corporation (WB), and XPO Logistics, Inc. (XPO).
On the short side, stocks included Chipotle Mexican Grill, Inc. (CMG), Cray Inc. (CRAY), Luxoft Holding, Inc. (LXFT), and Virtusa Corporation (VRTU).
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.