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TheStreet Open House

Top Swing Trade Ideas for Friday, July 25: Overstock.com, Walter Energy and More

NEW YORK (TheStreet) -- Good day, traders.

Friday's top swing pick ideas are Overstock.com (OSTK), Walter Energy (WLT) and Zix (ZIXI).

1. First we have Overstock.com the online retailer.

Overstock shares traded up nearly 16% on Thursday and closed at $16.19.

  • Wednesday's range: $14.00 - $16.67
  • 52-week range: $13.82 - $35.57
  • Wednesday's volume: 1,061,239
  • 3-month average volume: 289,821

Read More: Overstock CEO Expects Bitcoin Derivatives

Overstock looks good from a technical standpoint, as Thursday's volume was three times the average volume, shares traded up almost 16% and the chart is in a rounded-bottom breakout. Thursday's big move was from the 52-week low of $13.82, and the stock closed above the 50-day simple moving average. The price will likely pull back a bit Friday, as often when a stock makes such a large gain, there will be profit-taking and some consolidation for a few days or a week afterward.

I'd look for an entry above the 50-day simple moving average at $15.39. Depending on your entry, I would set a stop a safe distance below the 50-day simple moving average. I would target the 200-day simple moving average at $21.65, which is 25% to the upside from yesterday's close.

There is overhead resistance at about $16.96-ish, $18.33 and about $20.68, so watch for a pullback or consolidation at these levels. Stay long until you see a confirmed sell signal, or a close below the t-line.

2. Now we have Walter Energy, which produces and exports metallurgical coal for the steel industry.

Walter Energy traded up 4.95% on Thursday, closing at $5.94 per share.

  • Wednesday's range: $5.60 - $5.97
  • 52-week range: $4.25 - $19.50
  • Wednesday's volume: 3,009,810
  • 3-month average volume: 4,565,040

Walter Energy looks good technically, as it was a rounded-bottom breakout that has been confirming for a few days. I entered this position on July 18, when the share price engulfed the previous day's candle and closed over the 50-day simple moving average. Walter Energy reached its 52-week low on June 3 and has gained 38% since then. Now it has been consolidating over the 50-day simple moving average, as the price action is trying to clear the $6 resistance level.

Read More: Ponzi Scheme? Don't Be a Victim -- Read These Anti-Madoff Tips Now

I'd look for an entry anywhere above the 50-day simple moving average, which is at $5.48. I'd also set my stop just below the 50-day simple moving average, say about $5.39, as to not get stopped out prematurely. I would target the 200-day simple moving average, at $10.68, which is a whopping 79% to the upside from Thursday's close. This is why I like the rounded-bottom breakout so much -- big potential.

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

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