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Big Swing Trade Ideas for Friday, May 16

Stocks in this article: RP S WAC

Sprint traded up on Thursday 6.01% to $9.53 per share.

  • Thursday's range: $9.00 - $9.66
  • 52-week range: $5.61 - $11.47
  • Thursday's volume: 39,296,444
  • 3-month average volume: 15,900,600

Sprint had a big day yesterday and is near a breakout level of about $9.60.

Sprint beat estimated earnings on April 29, and has traded up 25% since earnings were reported. That's lucky for those who bought at the bottom!

We need to see continued strength today, but Sprint may pull back a little, due to normal Friday profit-taking. A pullback will offer us a better entry price. A good entry would be anywhere above $9 and below yesterday's close of $9.53, or an inside day entry. Start with a 1/4 position and add to the position on the breakout above $9.60.

I'd set a stop below yesterday's low, say about $8.90. Target the 52-week high of $11.47, which is about 17% to the upside. There is resistance at $9.79, then again at the gap down that occurred on Jan. 3. The gap down resistance levels are $10.03 to $10.40.

Stay long until you see a confirmed sell signal or a close below the t-line.

3. Next, let's see about Walter Investment Management, which together with its subsidiaries provides business services to the residential mortgage industry in the U.S.

WAC traded down on Thursday 1.74% to $28.81 per share.

  • Thursday's range: $27.71 - $29.08
  • 52-week range: $24.00 - $45.12
  • Thursday's volume: 1,330,776
  • 3-month average volume: 1,123,500

Walter more than doubled its estimated earnings, it reported last week. It had a huge day following that report, up 16.5%. Then it trade up a couple days, and profits were taken, gapping down on Wednesday. The gap down tested the bulls, and I believe the bulls prevailed, trading back over the t-line.

One problem is Jefferies' downgrade of the stock today.

There is resistance to $29.30 from the gap down, which has also been resistance for the last few months. The next overhead resistance levels are at $30.23, $30.78 and $33.20.

We need to see continued strength today and look for an entry above the t-line, at $28.64. Start with a 1/4 position and add to the position at the breakout above $30.65.

I'd set a stop at yesterday's open of $28.17. Stay long until you see a confirmed sell signal or a close below the t-line.

Good luck traders, and happy Friday!

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>>Read More: Reduce Your ETF Risk, Not Well-Deserved Rewards

At the time of publication, the author held no positions in any of the stocks mentioned.

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

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