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Top Swing Trade Ideas for Monday, August 4: DigitalGlobe, SodaStream, More

Stocks in this article: DGI SODA WAGE

NEW YORK (TheStreet) -- Good day traders!

Today's top swing trade picks are DigitalGlobe (DGI), SodaStream (SODA) and WageWorks (WAGE).

Read More: Time's Up! Alibaba or Softbank Should Buy Yahoo! Now

1. First, let's look at DigitalGlobe, which provides imagery and imagery information products and services in the U.S. and internationally.

DigitalGlobe traded up a big 11.55% on Friday, closing at $29.17 per share.

  • Friday's range: $27.63 - $29.84
  • 52-week range: $26.02 - $43.13
  • Friday's volume: 1,940,714
  • 3-month average volume: 615,523

DigitalGlobe looks good technically, as it is forming a rounded-bottom breakout. DigitalGlobe reported positive earnings last Thursday, and traded up a whopping 11.55% on Friday. The price action gapped up and traded over the 50-day simple moving average, clearing the last month's trading range. Plus, Friday's volume was three times the average trading volume, which tells us that there is bullish sentiment behind the 11% move.

Typically, when a stock trades up 11% in one day, there will likely be a pullback or consolidation for a few days. So I would look to enter this trade on a pullback above the 50-day simple moving average, at $28.86. I'd set a stop at about $28.68, which should be a support level. My ultimate target would be the 200-day simple moving average, which is at $33.57, and is 15% to the upside from Friday's close.

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

Read More: It Is Not Different This Time; Updating My Bond Short View: Best of Kass

2. Now let's look at SodaStream, which develops, manufactures and markets home beverage carbonation systems and related products.

SodaStream traded positive on Friday, closing up 3.18% to $34.05 per share.

  • Friday's range: $32.85 - $34.33
  • 52-week range: $28.65 - $69.78
  • Friday's volume: 1,424,258
  • 3-month average volume: 1,186,430

SodaStream is also a rounded-bottom breakout chart pattern. SodaStream reported positive earnings last week and gapped up, followed by a few days of buying pressure. On Friday, price action closed over the 50-day simple moving average by 6 cents, so we'll need a little confirmation today to assure us that the bullish trend is here to stay. SodaStream has attempted rounded-bottom breakouts in the near past, but has failed several times. So let's watch this trade closely and keep our stops tight.

Read More: GoPro Stock Is Still Attractive -- if You're a Short, That Is

I would like an entry above the 50-day simple moving average, which is at $33.99. Today's trading may open below the 50-day simple moving average, so I'd wait for confirmed bullish strength to enter this trade, and ideally, another close above the 50-day simple moving average. After entering above the 50-day SMA, I would set my stop just below the 50-day SMA, say at $33.84. As with all rounded-bottom breakouts, I target the 200-day simple moving average. The 200-day SMA is at $43.15, and is almost 27% to the upside from Friday's close.

There is some resistance at $36.90 and again at around $40, so watch for a pullback or consolidation at these levels, and look to add the position once these levels are cleared.

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

 

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