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The stock market had a very tough session on Wednesday. They had a pop at the opening, and then the S&P 500 rolled over in a 5-wave decline and took the Nasdaq 100 with it. However, some of our stocks did do well. We are going to take a look at both longs and shorts here, so you’ll get to see both.
Callon Petroleum Company (CPE), one of our favorites, has a long channel of waves with the fifth wave up underway, up 3.19, or 22%, to 17.64, on 11.5 million shares traded on Wednesday. It could very well reach 20-21, which is our original target. With the overall structure of the big base that was broken, it may very well get into the high 20’s, or thereabout.
U.S. Silica Holdings, Inc. (SLCA), a swing trade of ours and an old favorite, was up 5.42, or 12%, to 50.61, on 6 million shares traded on Wednesday. It made a significant move out of a wedge pattern and hit a new high at 51.31. What is beckoning to me, is something in the high 50’s.
Stocks on the Short Side…..
The Cooper Companies, Inc. (COO) really got smacked down 5.66, or 3.33%, to 164.49, on 1.36 million shares traded. The top pattern of this chart has been completed, it formed a bear flag, another bear flat, a bear wedge, and then had a breakdown on Wednesday. I think this may lead to a test of at least 158.00, but more than likely, we’ll see a test of 150.00.
Mercadolibre, Inc. (MELI) looks like it may have broken its bear flag on Wednesday. It formed a top, broke down, formed a rising bear flag to resistance, and then rolled over, dropping 5.09, or 3%, to 157.82, on 2.7 million shares traded. I’m looking to see if it can test 145.00, and then head down toward 125.00.
Stocks on the long side included CLR, Callon Petroleum Company (CPE), California Resources Corporation (CRC), E. I. du Pont de Nemours and Company (DD), Direxion Daily Energy Bull 3X ETF (ERX), Federal National Mortgage Association (FNMA), Direxion Dly S&P Oil&Gs Ex&Prd Bl 3X ETF (GUSH), Marathon Oil Corporation (MRO), MasTec, Inc. (MTZ), Oasis Petroleum Inc. (OAS), Resolute Energy Corporation (REN), U.S. Silica Holdings, Inc. (SLCA), and Whiting Petroleum Corp. (WLL).
On the short side, stocks included athenahealth, Inc. (ATHN), The Cooper Companies, Inc. (COO), DexCom, Inc. (DXCM), Flowers Foods, Inc. (FLO), G-III Apparel Group, Ltd. (GIII), Lululemon Athletica Inc. (LULU), Mercadolibre, Inc. (MELI), NetEase, Inc. (NTES), Red Robin Gourmet Burgers Inc. (RRGB), Teleflex Incorporated (TFX), and VCA Inc. (WOOF).
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.