NEW YORK (TheStreet) -- Good morning traders!
Today's top picks are all rounded bottom breakout chart patterns at different phases of the breakout. We will look at Cornerstone OnDemand (CSOD) - Get Report, Haemonetics Corporation (HAE) - Get Report and NetApp (NTAP) - Get Report.
Let's see how we can profit from these moves.
1. First, let's look at Cornerstone OnDemand, which provides cloud-based talent management solutions delivered as software-as-a-service. It offers four integrated clouds for recruiting, learning management, performance management and extended enterprise.
Cornerstone traded positive on Thursday, closing up 1.95% to $42.79 per share.
- Thursday's range: $41.64 - $43.50
- 52-week range: $32.82 - $61.85
- Thursday's volume: 1,843,349
- 3-month average volume: 1,193,990
Cornerstone looks good technically, as it has formed a bottom at a long-term support level at roughly $35.39. The chart formed a double bottom, testing that level a few times, and is now trading back to the upside.
Cornerstone beat earnings estimates on May 1, which seemed to help with investor sentiment. Yesterday, shares closed over the 50-day simple moving average, but barely.
This trade will need solid confirmation today by trading over the 50 again, and remaining over the 50. I'd like to see shares open above the 50, and gain strength to the upside.
I'd set a stop just below Wednesday's low of $39.70, which is a bit tight, so do as you see fit and feel comfortable with. As with all rounded bottom breakouts, I like to target the 200-day simple moving average.
I usually set a sell trigger just below the 200, and take profits there. The 200 is about 14.5% to the upside form yesterday's close. There is overhead resistance at $43.62, $44.27, $45.98 and again at $46.26. The most compelling long-term resistance is at $45.98, so watch for a little pullback here, or at least some consolidation.
Stay long until you see a sell signal, or a close below the t-line with confirmation.
Next up: Haemonetics.
2. Haemonetics engages in the design, development, manufacture and marketing of automated blood-component collection devices and surgical blood-salvage devices in the U.S. and internationally.
Haemonetics traded positive on Thursday closing up .78% to $34.68.
- Thursday's range: $34.26 - $34.79
- 52-week range: $29.86 - $45.90
- Thursday's volume: 436,110
- 3-month average volume: 662,716
Haemonetics looks good, as it's been trading positively for the last 16 trading days, up almost 15% in as many days. This chart became a rounded bottom breakout on Monday when shares closed over the 50. Confirmation came on Tuesday, and it's continued to confirm as it's been trading over the 50 all week.
I'd like to see increased volume on the breakout, so watch for that today. The share price could use a little pullback, say back to the t-line at $33.68, and I would like an entry just above that level for a greater percentage to the 200-day simple moving average. Again, I would target the 200 for a 10% move to the upside.
I'd set a stop just below the 50-day simple moving average at $33.28. There is overhead resistance at a gap down that occurred on March 23. The gap-down resistance levels are $35.35 to $37.19, so it will take some strength to break through these levels.
Keep in mind that charts rise and fall. They aren't going to shoot straight to the 200, so let the trade work. Stay long until you see a confirmed sell signal or a close below the t-line.
3. NetApp engages in the design, manufacture and marketing of networked storage solutions. The company supplies enterprise storage and data management software and hardware products and services.
NetApp traded positive on Thursday, closing up 4.84% to $36.16 per share.
- Thursday's range: $34.82 - $36.67
- 52-week range: $33.34 - $45.96
- Thursday's volume: 10,150,630
- 3-month average volume: 5,091,690
NetApp reported positive earnings on Wednesday, gapped up yesterday and closed above the 50-day simple moving average. Plus, yesterday it had double the average volume on the breakout. This is what makes for a good swing trade.
Look for continued strength today and continued trading above the 50. I'd look for an entry around the 50 at $35.96, if possible, and I'd set a stop at yesterday's low of $34.82. I would target the 200-day simple moving average for almost 10% to the upside. There is overhead resistance at $37.80 and again at the 200.
Stay long until you see a confirmed sell signal or a close below the t-line. Let the trade work.
Good luck today -- and have a great Memorial Day weekend!
Follow me on twitter @aarongallaher
At the time of publication, the author held no positions in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.