NEW YORK (TheStreet) -- Today's top swing-trade picks are Sears Holdings (SHLD), J.C. Penney (JCP) and Prosensa Holding N.V. (RNA).
First pick is Sears. The company operates as a retailer in the United States and Canada.
SHLD traded positive on Monday, closing up 4.04% to $43.50 per share.
Monday's range: 41.86 - 44.23
52-week range: 31.26 - 67.50
Monday's volume: 1,657,837
3-month average volume: 1,585,650
SHLD is a "rounded bottom breakout" chart pattern; one of my favorite chart patterns. SHLD traded positive along with other retailers like J.C. Penney, Macy's (M), Bon-Ton Stores (BONT) and Kohl's (KSS). SHLD closed above the 50-day simple moving average on Monday, triggering a buy signal. It is also forming a bullish flag type signal, not textbook, but good enough for me to watch for confirmation on Tuesday. I believe SHLD is a solid buy on positive trading on Tuesday.
SHLD has been in a short-term uptrend after finding its bottom when it reached it's 52-week low on April 14. There was a gap down on April 7, so there is resistance throughout the whole gap, those levels are $40.97 ~ $49.70. Shares have been consolidating for the last few days, so watch for a breakout above the current levels. I would look for an entry above the 50-day simple moving average, and I'd set a stop just below the 20-day simple moving average. My first target would be the 200-day simple moving average, which is just under 10% return. My next target would be the recent highs at around $50 per share, which will be a 15% return.
I would stay long until In saw a sell signal, or a close below the t~line (t~line = 8 EMA).
Next, we have J.C. Penney, through its subsidiary, sells merchandise through department stores in the United States. "Penny's" (without the e), as we used to call it when I was a kid, because you can buy clothes for the whole family for pennies.
J.C Penney trade positive yesterday, closing up a whopping 9.02% to $8.70 per share.
Monday's range: 7.97 - 8.85
52-week range: 4.90 - 19.63
Monday's volume: 34,613,185
3-month average volume: 25,741,400
JCP was a "rounded bottom breakout" back on Feb. 27 when it closed over the 50-day SMA, then traded up nearly 27%, depending on your entry, offering huge gains to investors. Those huge gains happened within a matter of days. After the big jump, shares consolidated, pulled back to test the 50-day SMA, and now is trading back up. JCP has formed a cup-and-handle type signal, which is a pretty reliable signal to trade. Also, it is in a moving-average squeeze, which means that yesterday's candle is engulfing some of the major moving averages.
I would like an entry in the range of $8.29~$8.70. Target the 200-day SMA at about $9.54, then target the recent highs at $10.19ish. There is near-term resistance at about $9, so don't be afraid of a little consolidation at this level. This stock needs to be watched closely, as it is technically still in a long-term downtrend, but it is also in a short term-uptrend. Just set your stops where you feel comfortable, and raise your stops with positive trading, so you can secure your profits.
JCP shares its earnings report on May 15. I personally do not hold any eargning, as strange things happen around earnings, and I'm not willing to risk it.
Next we have Prosensa Holding N.V., a biotechnology company that engages in the discovery and development of ribonucleic acid-modulating therapeutics for the treatment of genetic disorders.
RNA traded positive on Monday, closing up 8.55% to $6.73 per share. A big move for a cheaper stock.
Monday's range: 6.15 - 6.80
52-week range: 3.43 - 34.55
Monday's volume: 509,426
3-month average volume: 277,068
I like RNA for its 55% gain potential. RNA is in its first year of being publicly traded, and traded up roughly 80% after its initial public offering. RNA caught my attention on Friday when shares closed above its 50-day simple moving average. This chart is also a "rounded bottom breakout"; the breakout happened on Friday, but Monday confirmed the breakout. Look for an entry above the 50-day SMA, ideally you'd get an entry inside of yesterdays candle, in the range of $6.15~$6.80. But any positive trading would be a good entry.
There was a ginormous gap down back in September 2013, so there is resistance from the current levels, all the way to $23.29, so keep an eye on it. Target the 200-day SMA,
which should be huge gains of 55%. I would stay long until I saw sell signals, or a close below the t~line (8 EMA).
RNA reports earnings on May 16, so as I said before, I don't recommend holding over earnings, but trade as you feel comfortable.
Good luck traders, as luck favors the prepared!
At the time of publication, the author held no positions in stocks mentioned, 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.
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