NEW YORK (TheStreet) -- Good day traders!
What an interesting time in the stock market. The S&P 500
(SPY) and the Dow Jones Industrial Average
(DIA) keep reaching all-time highs -- but Tuesday the S&P failed to close higher, ending the day at the July 3 high of $198.20. There is an imaginary magnet pulling the S&P 500 price to $200, so it will likely reach this level in the coming week or so. Plus, the Dow formed a bullish engulfing signal on Tuesday, so it too will likely rise as well.
With these indicators on the rise, it's a good week to be a swing trader.
With that, today's top swing trade picks for are NIC
(EGOV - Get Report), Callon Petroleum
(CPE - Get Report) and E-House (China) Holdings Limited
(EJ - Get Report).
Apple Should Do Us a Favor and Buy Twitter
GM Shares Are Oversold and Earnings Will Prove It, Analysts Say
5 Biggest Amusement Park Chains of Summer 2014
How Teva Pharmaceutical Is Attacking the Generics to Defend Its Turf
1. First, let's look at NIC
, which provides eGovernment services. The company enables governments to use the Internet to provide services to businesses and citizens in the U.S.
NIC traded up 1.53% on Tuesday, and closed at $16.62 per share.
- Tuesday's range: $16.36 - $16.85
- 52-week range: $15.00 - $25.99
- Tuesday's volume: 245,564
- 3-month average volume: 306,631
NIC looks good technically, as it is in a rounded bottom breakout
that began on July 14, when it closed over the 50-day simple moving average. On July 14, the price action gapped up over 3% and the stock had a big bullish day, trading and closing over the 50-day SMA. Then, then following days there was some consolidation. Profit-taking and price action pulled back below the 50-day SMA. The rounded bottom breakout was unconfirmed after the first close over the 50-day SMA.
The real beauty in this chart occurred when the price action pulled down to its 52-week low on July 10. The stock chart formed a morning star candlestick signal. Then, the chart formed the trader's best friend: a doji followed by a gap up, which was confirmed the next day when it gapped up again. (A doji chart has a stock price that opens and closes in almost the same spot, but it may be wide-ranging in price over the course of the day.)
I would look for an entry anywhere above the 50-day simple moving average, which is at $16.45. I'd set my stop just below the 50-day simple moving average, then if the stock trades below that, get out. You can always re-enter when it comes back through the 50 SMA. Target the 200-day simple moving average at $20.37, which is 22% to the upside.
Stay long until you see a confirmed sell signal or a close below the t-line
Up next: Callon Petroleum and E-House.
Check Out Our Best Services for Investors
Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts