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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 - Get Report), 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

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.

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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