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It’s getting ugly out there. Nasdaq 100, S&P 500, and Dow, all closed at the lows going away on Tuesday. It could be headed lower a bit, so we’re going to look at both longs and shorts here. Let’s get started.
Clayton Williams Energy, Inc. (CWEI) has been steadily climbing the channel, all of my targets have been met, and it had another fantastic day on Tuesday, up 2.37 to 61.79, or 4%, on 1.2 million shares. My next target could be 68, or thereabout. Anywhere between Tuesday’s high at 63 and 68, I would be exiting this stock. It’s already completed, and in dire straits, meaning that it’s extended beyond belief. It needs some sort of intermediate-pullback consolidation, or at least retested. It has 6 days to cover.
U.S. Silica Holdings, Inc. (SLCA) is another stock that we’ve been talking a lot about as of late. You can see why. First of all, the beautiful base, then a breakout, swing trade, and it’s moved from the low-to-mid 20’s into the mid 40’s, since we gave our swing. The wedge near the top of the channel broke out the other day and kept going. It seems to have come out of that. Good OBV. I’m looking for more upside. The first target is 47, and then eventually we may see it in the 52-53 range. On Tuesday, it was up 71 cents to 40.51, or 2%, on 1.7 million shares. It has 6.54 days to cover.
Stocks on the Short Side….
Akamai Technologies, Inc. (AKAM) is still headed lower, down another 5 cents to 52.00, on 1.2 million shares. After the big breakdown in Nov, it plunged from 78 to 38, ran back into the 58 range, tried to get through the declining topsline four times, couldn’t get through, plunged, and is forming another bear wedge. At this point, this rising wedge or coil could rollover and get hammered back to 47, and then we’re looking for something in the low-to-mid 40’s.
Stamps.com, Inc. (STMP) was down 19 cents to 86.88, on 368,210 shares traded. It broke down in March, came down and wedged, came down and flagged, had a pretty hard hit at support, and recently formed a rising wedge again. It has terrible technicals. If it fails here, targets are 65, and then 55.
Stocks on the long side included Clean Energy Fuels Corp. (CLNE), Comstock Resources Inc. (CRK), Clayton Williams Energy, Inc. (CWEI), Eleven Biotherapeutics, Inc. (EBIO), Minerva Neurosciences, Inc. (NERV), Resolute Energy Corporation (REN), U.S. Silica Holdings, Inc. (SLCA), SodaStream International Ltd. (SODA), and TPI Composites, Inc. (TPIC).
On the short side, stocks included Akamai Technologies, Inc. (AKAM), Cal-Maine Foods, Inc. (CALM), Luxoft Holding, Inc. (LXFT), Signet Jewelers Limited (SIG), Stamps.com Inc. (STMP), Synaptics Inc. (SYNA), and WebMD Health Corp. (WBMD).
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.