Tomorrow’s stock picks are based on price action patterns as I’ve found that short-term trading opportunities are much more easily found using technical analysis over fundamentals. For a good book on technical analysis see John Murphy’s encyclopaedic Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications (New York Institute of Finance)
It’s expensive, but then again it could be the only technical analysis book you’ll ever need.
In terms of next week, stock markets should be strong again, helped by the most recent non-farm payrolls print of +175,000 jobs.
Tomorrow’s stock picks:
Nathan’s Famous Inc ($NATH)
Descending triangles are nice, bread and butter, price action patterns. Basically, as two trend lines converge in a triangle they form an apex point, whereby the market has nowhere to go but to break out in either direction.
Nathan’s has reached that point and looks poised for an upward breakout next week. A stop can be place directly below the market at $48.50.
Ares Capital Corporation ($ARCC)
The second of tomorrow’s stock picks is Ares. The company is in a nice upward trend and has found support along the bottom of the channel. Looks like the stock will move back up towards the top. Stop can be placed just below, at $17.60.
Bon-Ton Stores Inc ($BONT)
Another channel pattern. Bon-Ton Stores has hit a double bottom and looks to be on the up. Stops can be placed at $10 and we can look for a move toward $14.50.
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