As mentioned in the previous post, we do not have a lot of faith in the market at present. Many indicators are flashing red but stock markets continue to rally thanks to the backdrop of loose monetary policy.

Even so we will stick to our trading strategies and hope to find alpha in un-correlated opportunities. It should be another interesting week and non-farm payrolls could prove to be a big event.

Below are the setups we are watching this week:

Bullish Setups

Omnova Solutions $OMN

Omnova Solutions posted strong earnings results last week and went on to rally on heavy volume. The stock looks to have broken it’s prior resistance and could push on to $8 this week.

Screen Shot 2016-07-05 at 1.26.35 PM

Kellogg $K

We do not like the long-term fundamentals of Kellogg at this stage as the stock trades at 51 times earnings. However, we think the stock could continue to rally in the short-term as a result of recent news coverage and bullish sentiment.

Screen Shot 2016-07-05 at 1.26.46 PM

Bed Bath & Beyond $BBBY

Bed Bath & Beyond looks to be in a process of bottoming as shown by the multiple bottom chart below. We see the stock moving past $45 but are not looking for a long-term breakout.

Screen Shot 2016-07-05 at 1.45.44 PM

Alliant Energy $LNT

Alliant Energy is in a long-term uptrend and we saw a bullish candlestick pattern on Thursday. LNT has just been added to the S&P 500 Index and we think the stock could still benefit from that this week.

Screen Shot 2016-07-05 at 1.27.07 PM

Imation Corp $IMN

Imation Corp flashed an inverted hammer pattern on Friday which is one of our favourite candlestick patterns. However, the stock is under $2 and has a market cap of less than $50 million. This means we will probably pass this trade.

Screen Shot 2016-07-05 at 1.50.53 PM

Bearish Setups

Paychex Inc $PAYX

Paychex Inc. posted strong earnings last week and put in a strong rally on heavy volume. This would normally be a bullish signal, however, we think there are a number of speculators in this stock and we could see some profit taking this week.

Screen Shot 2016-07-05 at 1.27.29 PM

Tesaro Corp $TSRO

Tesaro Corp. rallied over 100% last week after a successful trial of one of it’s cancer drugs. However, shortly after the company issued a public offering and we think there could be profit taking this week.

Screen Shot 2016-07-05 at 1.26.25 PM

Xencor Inc $XNCR

Xencor Inc. also rallied strongly last week after a deal with Novartis. The stock only has a small short float but it looks overbought at this level and we could see profit taking. (We always trade biotech stocks like this with minimal risk and stops in place).

Screen Shot 2016-07-05 at 1.26.13 PM

Cliff’s Natural Resources $CLF

Cliff’s Natural Resources is a volatile stock that we sold previously for a profit. The stock hit resistance at $6 last week and closed off it’s highs. The stock also has a high short float and could fall back from here.

Screen Shot 2016-07-05 at 1.51.09 PM

Stone Energy Group $SGY

Stone Energy Group looks to be overbought at this price level and also exhibits a shooting star candle formation. As well, the stock has a high short float. We will probably pass this trade for now but keep it on our watchlist.

Screen Shot 2016-07-05 at 1.48.56 PM

All charts on this page taken from FINVIZ*Elite – #No.1 For stock charts and analysis.

 


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