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Top Swing Picks for Monday

Stocks in this article: WYSPLSTFM

Companies which do well generally tend to report (their quarterly earnings) earlier than those which do poorly.
--Alan Abelson


NEW YORK (TheStreet) -- Today's top swing picks are Weyerhaeuser Company (WY), Staples  (SPLS) and The Fresh Market  (TFM).

First pick is, forest products company Weyerhaeuser. It grows and harvests trees, builds homes and manufactures forest products worldwide. The company reported positive earnings on Friday, and as a result, shares traded up 2.71%, closing at $29.52 per share. 

Friday's range: 28.76 - 29.65

52-week range: 26.38 - 33.24

Friday's volume: 4,606,689

3-month average volume: 3,727,580

WY formed a giant bullish candlestick on Friday, and will likely pull back this morning. A pull back will offer a better entry level, a good entry is anywhere between $28.94 - $29.53. WY has been in a downtrend since the end of December, and recently began trading below the major moving averages. On Friday, price action gapped up over the 20-day simple moving average, and Friday's candle engulfed the 34-day exponential moving average, the 50-day simple moving average, and the 200-day simple moving average, which is known was a moving average squeeze, a bullish indicator. Watch for continued bullish trading today. There is overhead resistance at about $29.80, $ $30.20, $30.50 and again at $32.52, so watch for sideways trading at these levels. Target the 52-week high at $33.24, which is roughly 12.5% from Friday's close.

12% return in a week or two, that's great return. I would stay long until I saw a sell signal, or a close below the 8-day exponential moving average, with confirmation.  

Next we have, Staples, which together with its subsidiaries, operates office products superstores.

Staples traded up 1.53% on Friday, closing at $12.29 per share.

Friday's range: 11.86 - 12.38

52-week range: 11.04 - 17.30

Friday's volume: 11,877,338

3-month average volume: 11,443,600

SPLS formed a long legged doji on Friday, which is a clear sentiment message. With it's long bottom wick, it shows that there is buying pressure at this level. Staples has been in an uptrend since reaching it's 52-week low at $11.04, on March 27. This is a chart pattern known as a "rounded bottom breakout." The breakout happens when price action closes over the 50-day simple moving average (50 SMA). With a close over the 50-day SMA, there needs to be confirmation today, with continued trading over the 50-day SMA, and a close again over the 50-day SMA.

Friday's candle closed at near-term resistance levels, and price action will want to close the gap down that occurred on March 6. All gaps get closed. Gaps are considered resistance throughout the whole gap, those levels are $11.87 - $13.30. Target the 200-day simple moving average at $14.51. Set a stop just below the 20-day simple moving average, at $11.96. A trade to the 200-day SMA will be nearly an 18% move. Not to say it will stop there, but that is a good start, and a great trade. 

Next, the Fresh Market is a specialty food retailer in the United States. The company offers various perishable product categories, including meat, seafood, produce, deli, bakery, and more.

TFM traded lower on Friday, down .33%, closing at $36.09 per share.

Friday's range: 35.67 - 36.38

52-week range: 31.35 - 57.16

Friday's volume: 521,571

3-month average volume: 953,140

TFM has been in a downtrend since reaching its 52-week high last August. Although, shares have been trading positive since reaching its 52-week low in February. TFM is also a "rounded bottom breakout" that first occurred on April 1st, since then, shares have consolidated by trading sideways. Now watch for a breakout above current levels, and above near-term resistance at $36.83. Again, target the 200-day simple moving average, which will be a +20% move. 

There is resistance at $39.32, $40.93 and at the gap down levels that occurred on November 22; those levels are $42.49 to $49.26. I would set a stop at $34.49, or wherever you feel comfortable. This is a big move, 20% is excellent return. I would stay long until I saw a sell signal, or a close below the 8-day exponential moving average.

Good luck, traders!

At the time of publication, the author was long Staples, although positions may change at any time.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Aaron Gallaher is based out of Sonoma County California, and is a contributor for wallstplaybook.com and hitandruncandlesticks.com. He focuses on short-to-intermediate term trades using candlestick analysis as his baseline for his trade ideas. He is a ghostwriter for candlestick analysts, and contributes daily stock picks for wallstplaybook.com. He trades daily and analyzes charts daily. He trades charts, not news; news is subjective, but charts are factual. Follow him on Twitter @aarongallaher. Disclaimer: This site may include market analysis. All ideas, opinions, and/or forecasts, expressed or implied herein, information, charts or examples contained in the forecasts are for informational and educational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise.

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