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Cloud Buys: Big Swing Trade Ideas for Friday, May 23

NEW YORK (TheStreet) -- Good morning traders!

Today's top picks are all rounded bottom breakout chart patterns at different phases of the breakout. We will look at Cornerstone OnDemand (CSOD - Get Report)Haemonetics Corporation (HAE - Get Report) and NetApp (NTAP - Get Report).

Let's see how we can profit from these moves.

1. First, let's look at Cornerstone OnDemand, which provides cloud-based talent management solutions delivered as software-as-a-service. It offers four integrated clouds for recruiting, learning management, performance management and extended enterprise.

Cornerstone traded positive on Thursday, closing up 1.95% to $42.79 per share.

  • Thursday's range: $41.64 - $43.50
  • 52-week range: $32.82 - $61.85
  • Thursday's volume: 1,843,349
  • 3-month average volume: 1,193,990

Cornerstone looks good technically, as it has formed a bottom at a long-term support level at roughly $35.39. The chart formed a double bottom, testing that level a few times, and is now trading back to the upside.

Cornerstone beat earnings estimates on May 1, which seemed to help with investor sentiment. Yesterday, shares closed over the 50-day simple moving average, but barely.

This trade will need solid confirmation today by trading over the 50 again, and remaining over the 50. I'd like to see shares open above the 50, and gain strength to the upside.

I'd set a stop just below Wednesday's low of $39.70, which is a bit tight, so do as you see fit and feel comfortable with. As with all rounded bottom breakouts, I like to target the 200-day simple moving average.

I usually set a sell trigger just below the 200, and take profits there. The 200 is about 14.5% to the upside form yesterday's close. There is overhead resistance at $43.62, $44.27, $45.98 and again at $46.26. The most compelling long-term resistance is at $45.98, so watch for a little pullback here, or at least some consolidation.

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

Next up: Haemonetics.

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HAE $44.48 0.00%
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