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It was a tough day on Wall Street on Tuesday, the first day back after a 3-day vacation. We’re not as surprised as we may have been because the market was up and due for a pullback-consolidation retest, etc. Let’s take a look at the stocks that did well and those that did not do well.
On the long side, several marijuana stocks woke up and had a little bit of a good day. Let’s begin by looking at Aphria Inc. (APHA) for starters. It popped, got above the 50, but closed below it, which is a little bit of a concern. It is still in a rising pattern, or is it in a large ascending channel or a large bear flag? I doubt it’s a bear flag. It looks like a channel to me, and that’s why it’s been a current swing trade. Look at the recent orderly pullback on low volume, the volume picked up a little bit on Friday, and on Tuesday it popped 40 cents, or 6%, to 7.08, on 8.2 million shares, and then it moved back down below the 50. There’s a little bit of a gap to fill above here at about 8.08. If it gets through that, we may see something around 8 1/2, maybe 9 1/4-1/2. If it can get above the 50 things change in general. The underlying technicals have been improving. So, let’s go with that.
A gold stock favorite for a long time now, Kirkland Lake Gold Ltd. (KL), reached a new all-time high at 27.68 on Tuesday with a pop of 1.30, or 5%, to 27.64, on 939,400 shares traded. It was recommended with a 44.00 target, but I will maintain my near-term target at 32-33.
Swing trade TAL Education Group (TAL) is acting well. It popped out above resistance on Tuesday, gaining 1.01, or 3.35%, to 31.20, on 6.3 million shares. I think it has legs to get up to 33 and 36. Those are my targets.
Stocks on the Short Side….
Automatic Data Processing, Inc. (ADP) has a rising wedge that goes right to the declining topsline, which is the perfect place to short a stock. On Tuesday, it was down another 2.01, or 1.49%, to 133.17, on 2.7 million shares traded. The volume picked up a little bit. Let’s see if this one is able to break down. If it does, this stock has a topping pattern looking like a left shoulder-head-right shoulder breakdown, neckline retest, moving average rolling over, what’s looks like a declining topsline, and a target down about the 111-113 zone.
GrubHub Inc. (GRUB) was put out as a swing trade on Tuesday as I liked this pattern as a short. The internal trendline looks like it failed a couple of times. Not only where the internal trendline is located, but the 50-day moving averages failing as well. It broke down below the 10-day on Tuesday, dropping another 6.41, or 7.92%, to 74.56, on 2.8 million shares. For me, a test of 68 is probable, and 56-58 is possible.
IRadimed Corporation (IRMD) broke that first wedge down significantly as a tech trader swing short. It dropped 2.15, or 8.33%, to 23.65, on 138,734 shares traded on Tuesday, even though it did bounce off of support, which comes in around 22 1/4. I think this stock is designed to go even lower than that, so, we’ll see, but for me, the fifth wave down may be headed to the high teens in the 17-18 zone.
Stocks on the long side included Aphria Inc. (APHA), Canopy Growth Corporation (CGC), Cronos Group Inc. (CRON), Aerpio Pharmaceuticals, Inc. (ARPO), Axsome Therapeutics, Inc. (AXSM), Freddie Mac (FMCC), Federal National Mortgage Association (FNMA), ION Geophysical Corporation (IO), Kirkland Lake Gold Ltd. (KL), El Pollo Loco Holdings, Inc. (LOCO), TAL Education Group (TAL), Titan Medical Inc. (TMDI), VelocityShares Daily 2x VIX ST ETN (TVIX), and ProShares Ultra VIX Short-Term Futures (UVXY).
On the short side, stocks included Automatic Data Processing, Inc. (ADP), Cutera, Inc. (CUTR), Carvana Co. (CVNA), Editas Medicine, Inc. (EDIT), GrubHub Inc. (GRUB), IRadimed Corporation (IRMD), Medifast, Inc. (MED), Mimecast Limited (MIME), Shutterfly, Inc. (SFLY), SINA Corporation (SINA), Tailored Brands, Inc. (TLRD), Tower Semiconductor Ltd. (TSEM), and Weight Watchers International, Inc. (WTW).