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TheStreet Open House

Top Swing Trade Ideas for Wednesday, July 23: NIC, Callon Petroleum, More

Stocks in this article: EGOV CPE EJ SPY DIA

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).

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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.)

Great potential.

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.

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