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 pretty ugly day on Wall Street on Monday, finishing at the lows for the day. It's right near key resistance, and very vulnerable, so we'll have to watch closely to see what happens over the next couple days. We’re going to start off by looking at the indices here, and cover both longs and shorts. Let's get started.
Array BioPharma Inc. (ARRY) had an excellent day on Monday, up 2.96, or 81%, to 6.61, on 102 million shares traded on positive drug results. Any time a stock gaps from 3-3 3/4 range, opens at 3.65 and runs up to 6.65, and then trades at 7.40 in after hours, may be an indicator that it is a runner. The volume is unbelievable. An explosive move, and it may run up to 8, or 9, even 10. I have key-key resistance in the zone between 8-8 1/2, so to get through that would be a real accomplishment, and then it may pullback. Longer-term I’m looking at 13-14.
Puma Biotechnology, Inc. (PBYI) had a good day on Monday. Even though it went into a consolidation mode after the big pop, it was up 1.60, or 2.35%, to 69.68, on 900,841 shares traded. I actually think it can make it to 80.00.
Luxoft Holding, Inc. (LXFT) really got smacked on Monday, down another 3.80, or 6.8%, to 51.95, on 445,765 shares traded. The bottom of the channel comes in around 38. I’m looking for a test of the 46-44 zone.
Red Robin Gourmet Burgers Inc. (RRGB) continues to drop. It was down another 1.59, or 3.4%, to 45.81, on 115,241 shares traded. It looks like it’s about to crack. If it does, look for it to run down to the 39-40 area.
Stocks on the long side included Amkor Technology, Inc. (AMKR), Ariad Pharmaceuticals Inc. (ARIA), Array BioPharma Inc. (ARRY), Cara Therapeutics Inc. (CARA), CoLucid Pharmaceuticals, Inc. (CLCD), Exelixis, Inc. (EXEL), GW Pharmaceuticals plc (GWPH), Puma Biotechnology, Inc. (PBYI), Radcom Ltd (RDCM), Twitter, Inc. (TWTR), and Zynerba Pharmaceuticals, Inc. (ZYNE).
On the short side, stocks included salesforce.com, inc. (CRM), Dollar General Corporation (DG), SPDR S&P Global Infrastructure ETF (GII), Luxoft Holding, Inc. (LXFT), Norwegian Cruise Line Holdings Ltd. (NCLH), Red Robin Gourmet Burgers Inc. (RRGB), Signet Jewelers Limited (SIG), Synaptics Inc. (SYNA), and Gentherm Incorporated (THRM).
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.