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TheStreet Open House

Big Swing Trade Ideas for Thursday, May 1

NEW YORK (TheStreet) -- Happy May Day! According to the Stock Traders Almanac, May 1 has been bullish 12 years out of the last 16. The investing maxim of "sell in May and go away" is attributed to John L. Person -- but I think he meant later in May, not in the first week. 

It is earnings season, and many companies are reporting today. Some notable ones are Exxon Mobil (XOM), Kellogg (K), Mastercard (MA) and Motorola (MSI).

With so many companies reporting, there is a lot of movement in the market, so without further ado....

Today's top swing picks are Rite Aid (RAD), nTelos Holdings (NTLS) and Grupo Financiero Santander Mexico (BSMX).

1.  My first pick is Rite Aid, which operates a chain of retail drugstores in the U.S. Rite Aid traded positive yesterday and closed up 2.96% to $7.30 per share.

  • Wednesday's range: 6.97 - 7.32
  • 52 week range: 2.47 - 7.39
  • Wednesday's volume: 41,050,218
  • 3 month average volume: 24,395,200

Rite Aid's chart looks pretty rad, as we say in California. The stock has been in a major uptrend since December 2012. There have been some pretty major pullbacks in that time, but it never really traded below the 100-day simple moving average, and only tapped it three times in the last two years. So you could stand back and see that this is a solid trend, that has no sign of stopping.

Rite Aid reported positive earnings on April 10, and as a result, shares gapped up and traded to their 52-week high at $7.39. Investors took profits on that gap up, and shares have been consolidating since then. Yesterday the stock formed a bullish kicker-type signal, with waxing volumes for the last two trading days. These are signs that shares will trade higher, and the trend will continue as it has for years.

I'd set a stop at $6.73, and stay long with the trend until you see a confirmed sell signal or a confirmed close below the t-line. There is no real resistance to speak of, so target the moon. Remember that charts will move up and down. Let the trade work. This chart is the perfect example of this.

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