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Top Swing Trade Ideas for Monday, August 11: Coach, Clovis Oncology, More

Stocks in this article: COH CLVS YOKU

2. Now, let's look at Clovis Oncology, a biopharmaceutical company focused on acquiring, developing and commercializing anticancer agents in the U.S., Europe and internationally.

Clovis had a big day on Friday, closing up 10.8% at $40.88.

  • Friday's range: $32.07 - $42.07
  • 52-week range: $35.33 - $93.33
  • Friday's volume:1,380,662
  • Three-month average volume: 921,392

Clovis looks good technically, as it formed a bottom at $36.35 that tested and held that level. Then on Friday, price action jumped up 10%, closing over the 50-day simple moving average. Friday's price action closed right at a resistance level, and has one more near-term resistance level to clear at $42.81. Since Friday was such a big day, price action will likely trade lower today, which will offer us a better entry level.

I also like Clovis since on Friday the two-day exponential moving average crossed over the t-line, and the t-line crossed over the 20-day simple moving average. I find this action to be very bullish, and often times I will enter a trade with that criteria.

Read More: Americans Still Hate Bag Fees, and Most Lack a Preferred Airline

I'd look for an entry at about $40.22, which is where the 50-day simple moving average is. There is overhead resistance at $42.81, so some traders may want to wait for a break above this level. I'd set a stop at about $39.53, as I wouldn't want it to close below this level. The first target will be $47.77-ish, then $51.80, $54.54 and finally the 200-day simple moving average. Those targets are 16%, 24%, 33% and 39% higher, respectively, from Friday's close.

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

3. Lastly, lets look at Youku Tudou, which operates as an Internet television company in the People‚Äôs Republic of China.

Youku traded up 8.04% on Friday, closing at $21.09 per share.

  • Friday's range: $19.80 - $21.35
  • 52-week range: $17.77- $37.74
  • Friday's volume: 6,270,071
  • Three-month average volume: 2,948,170

Yoku looks good since it is a rounded bottom breakout that failed in June and is attempting to breakout out again. Yoku is also a case where the 2 exponential moving average crossed over the t-line, and the t-line crossed over the 20-day simple moving average. Friday's price action closed over the 50-day simple moving average, so I'd like to trade this to the peak in the current downtrend, or catch it as low as possible on a bullish turnaround. Last time Yoku closed over the 50-day, it traded up 12% before continuing its bearish trend. 

Today will likely be an inside day, where the price action stays within Fridays range, so look for the cheapest entry today. I'd look for an entry above the 50-day simple moving average, at $20.71, or as high as Friday's close, $21.09. I'd set a stop at about $20.50. I would first target the nearest resistance level at $23.70, 12% to the upside, then target the 200-day simple moving average at $26.27, 24% to the upside. 

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

Come see me at my second home and sign up for the two-week trial. You'll find a trading room with tons of professional traders who help each other learn and succeed.

At the time of publication, the author held no positions in any of the stocks mentioned, although positions may change at any time.

Follow @aarongallaher


Now let's look at TheStreet Ratings' take on some of these stocks.

TheStreet Ratings team rates COACH INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate COACH INC (COH) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and a generally disappointing performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • COH's debt-to-equity ratio is very low at 0.06 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.31, which illustrates the ability to avoid short-term cash problems.
  • The gross profit margin for COACH INC is rather high; currently it is at 69.40%. Regardless of COH's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.62% trails the industry average.
  • COACH INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, COACH INC reported lower earnings of $2.78 versus $3.62 in the prior year. For the next year, the market is expecting a contraction of 31.6% in earnings ($1.90 versus $2.78).
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income has significantly decreased by 66.0% when compared to the same quarter one year ago, falling from $221.34 million to $75.28 million.

TheStreet Ratings team rates YOUKU TUDOU INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate YOUKU TUDOU INC (YOKU) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its disappointing return on equity, poor profit margins, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Internet Software & Services industry and the overall market, YOUKU TUDOU INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for YOUKU TUDOU INC is currently extremely low, coming in at 12.22%. It has decreased significantly from the same period last year. Along with this, the net profit margin of -32.08% is significantly below that of the industry average.
  • YOKU has underperformed the S&P 500 Index, declining 18.47% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • YOUKU TUDOU INC's earnings per share improvement from the most recent quarter was slightly positive. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, YOUKU TUDOU INC reported poor results of -$0.58 versus -$0.52 in the prior year. For the next year, the market is expecting a contraction of 144.8% in earnings (-$1.42 versus -$0.58).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Internet Software & Services industry average. The net income increased by 3.4% when compared to the same quarter one year prior, going from -$37.43 million to -$36.15 million.

Aaron Burt is based out of Sonoma County California, and is a contributor for hitandruncandlesticks.com. He focuses on short-to-intermediate term trades using candlestick analysis as his baseline for his trade ideas. He is a ghostwriter for candlestick analysts. He trades daily and analyzes charts daily. He trades charts, not news; news is subjective, but charts are factual. Follow him on Twitter @aarongallaher.
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