We took some good trades last week, the cream of the crop being $OMN which continued to surge after posting strong earnings.

This week should be interesting with the S&P 500 a whisker away from record highs.

For now, the momentum is with the bulls. After last Friday’s positive non-farm payrolls number we will surely see the index break new ground this week.

Traders will also be watching the start of earnings season, the first BOE monetary meeting since Brexit (Thursday) and Chinese GDP (Friday). As a result, we see market strength early in the week, possibly diminishing towards Friday.

Here are 5 stock setups we are watching this week:

Bullish Setups

Barrcuda Networks Inc. $CUDA

Barracuda Networks Inc. surged higher last Friday on strong earnings numbers – reporting EPS of 20 cents vs 11 cents expected. The stock also opened on a gap up which is usually a positive signal. However, the gap was a little larger that we’d normally like.

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Danaher Corp. $DHR

Danaher Corp. rallied firmly last week and drifted higher after the company wrapped up the spin-off of Fortive Corp $FTV. We think this development may take some time for some investors acknowledge and this may represent an opportunity. Don’t be fooled by the chart which has not yet been updated for the split. Finviz updates splits every Monday.

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Bearish Setups

DRDGOLD Ltd. $DRD

Considering payrolls came out stronger than expected on Friday and with stocks at all-time highs it could be time for a pause in gold.

Continuing that theme, we can see DRDGOLD dumping this week. Gold miners have been the market’s best performers this year and are now sharply overbought. DRD is up almost 500% YTD and we are surely going to see some profit-taking at some point.

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As an aside, we have also seen a renewed interest in gold mining stocks on Google Search indicating an increase in retail speculation.

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Digital Ally Inc. $DGLY

Digital Ally is one of the most trending stocks on StockTwits with a high bullish sentiment. This is despite the stock being up 70% on the week and being of a speculative nature (based on past history). However, this is a low float stock, and therefore this not a one-way bet by any means.

Digital Ally

One more to watch

Anthera Pharmaceuticals Inc. $ANTH

Anthera Pharmaceuticals looks like an interesting stock to watch this week. The stock surged on Friday after being profiled on CNBC. This attention may have caused an unnecessary price boost with speculators getting on board. It could offer a good short opportunity at some point depending on news flow and price action.

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

Disclaimer.

 


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