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Big Swing Trade Ideas for Monday, June 2 With Huge Gain Potential

2. Next, let's look at Theravance, a biopharmaceutical company, is engaged in the discovery, development and commercialization of small-molecule medicines primarily for the therapeutic areas of respiratory diseases, bacterial infections and central nervous system pain.

Theravance traded down 0.1% on Friday, closing down 5 cents to $28.65 per share. 

  • Friday's range: $28.23 - $28.99
  • 52-week range: $25.11 - $42.96
  • Friday's volume: 461,131
  • 3-month average volume: 989,456

Theravance is also a rounded bottom breakout after it closed above the 50-day simple moving average for the last two trading days. Price action has been consolidating for the last week, so watch for a breakout of these levels on Monday, above Friday's high.

Theravance reported earnings on May 6, then traded to its 52-week low. It's now up 14% from that low. I'd look for an entry above the 50 on strength, above $28.32. I'd set a stop at about $27.89, which is a bit tight. But set the stop according to your risk tolerance.

As with all rounded bottom breakouts, I target the 200-day simple moving average first, which is a big upswing of almost 22% from Friday's close. There is some overhead resistance, but the most compelling is at $34.06, which would also be a good target of 18% to the upside. There is declining volume on bearish days, which tells me that investors are looking for the bullish moves over the bearish moves.

This trade may consolidate for a few more days before the breakout, so stay long until you see a confirmed sell signal, or a close below the t-line.

3. Now, let's look at Ventrus Biosciences, a development-stage specialty pharmaceutical company focusing on the late-stage development and commercialization of gastrointestinal products in the U.S.

Ventrus traded lower on Friday by 1 cent, down 0.79%, and closed at $1.26 per share.

  • Friday's range: $1.14 - $1.31
  • 52-week range: $0.85 - $4.69
  • Friday's volume: 1,306,784
  • 3-month average volume: 596,155

Ventrus is a small-cap stock, which can be more dangerous than the larger cap stocks, so watch out for that. Plus it's a penny stock, which adds even more risk. 

I like Ventrus because of its current gain potential. It is also a rounded bottom breakout.

Ventrus has been in a downtrend since it gapped down huge back in February, dropping 62%. Ouch. After that gap down, shares continued to trade lower, reaching the stock's 52-week low after a poor earnings report on May 14. Now shares are trading back up with some bullish strength. On Thursday, volume was almost seven times the normalized volume, and the shares closed over the 50. On Friday, shares continued to trade above the 50, and again closed above the 50, confirming the breakout.

There is overhead resistance at Thursday's high of $1.42, and throughout the entire gap down in February. I'd set a stop at the 50-day simple moving average, and target the 200-day simple moving average, at $2.43.

Here is why I like this trade so much. There is a 92.5% upside potential to the 200-day simple moving average. Gains like this are why I am a trader. Remember, that price action never shoots up 92% in a day, so let this trade work. Move your stop up as the price rises, so you can secure your profits on the way up. Even if you targeted the bottom of the gap down at $1.62, that would still be almost 30%.

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

Follow me on twitter @aarongallaher, and Linkedin at Aaron Burt.

>>Read More: Krispy Kreme, Three Others Are Poised for More Volatility

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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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