NEW YORK (TheStreet) -- Good day, traders!
1. First, lets look at Advantage Oil & Gas, which acquires, exploits, develops and produces oil and gas in the provinces of Alberta and Saskatchewan, Canada.
Advantage traded up 5.4% on Friday, closing at $5.65.
- Friday's range: $5.43 - $5.74
- 52-week range: $3.47 - $7.23
- Friday's volume: 900,660
- Three-month average volume: 397,283
Advantage looks good as there has been a bottom forming for the last couple weeks at the $5.30 level. On Friday, shares traded over a near-term resistance level with almost triple the average volume. Advantage is down 21% from it's 52-week high, which was reached back in June. Now, it appears that the bulls are back in charge and will drive shares back to the top. Friday's trading caused the two-day exponential moving average to cross over the t-line, and the t-line over the 20-day simple moving average. This is a clear bullish move.
I'd look for an entry within Friday's trading range, between $5.43 - $5.74. I'd set my stop at the bottom that was established over the last few weeks, at $5.30. A break below that level would confirm the continued downturn. I would target the 52-week high of $7.23 ultimately. That said, there is overhead resistance at $6.31 and $6.66, so watch for a sell signal at those levels.
Stay long until you see a confirmed sell signal or a close below the t-line.
2. Now, lets look at Lam Research, which designs, manufactures, markets, refurbishes and services semiconductor processing equipment used in the fabrication of integrated circuits.
Lam Research traded up 1.5% on Friday, closing at $69.65.
- Friday's range: $68.51 - $70.17
- 52-week range: $46.20 - $72.92
- Friday's volume: 2,415,892
- Three-month average volume: 1,910,870
Lam Research looks good for today as price action has pulled back and has bounced off the 50-day simple moving average. On Friday, shares traded over the previous week's trading range and closed above the 20-day simple moving average. Plus, Friday's action formed a doji gap up, the traders best friend, and had increased volume that was greater than average.
I'd look to enter a position above the 20-day simple moving average, at or above $69.45. I'd set a stop on a close at or below $68.38. I would target the 52-week high initially, then I would look to stay in this trade until it reaches the top of the previous uptrend trading channel. Shares have had a hard time clearing the $72 level, so watch for a sell signal at this level. Once the $72 level is cleared, lets watch for a breakout above this level.
Buy the dip, take profits at the peaks. Stay long until you see a confirmed sell signal or a close below the t-line.
3. Lastly, lets look at Netflix, which delivers via the Internet TV shows and movies to TVs, computers and mobile devices.
Netflix traded up 1.82% on Friday, closing at $459.09.
- Friday's range: $448.60 - $462.00
- 52-week range: $257.75 - $475.87
- Friday's volume: 2,859,730
- Three-month average volume: 2,702,180
Netflix looks good as shares are rallying off the bottom. It has formed a bullish cup-and-handle signal. Friday's close cleared most of the near-term resistance, and now shares are looking to take out the 52-week high of $475.87. As I write this article, shares are trading up premarket, and looks like there will be a gap up Monday morning.
I'd look to enter this trade as low as possible, and ideally enter within Friday's trading range. I'd set a stop at $445.87, which was last Tuesday's closing price. I would look to target the 52-week high and stay in this trade until you see a sell signal. Stay long until you see a confirmed sell signal or a close below the t-line.
Good luck traders!
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At the time of publication, the author held no positions in any of the stocks mentioned, although positions may change at any time.
Now let's look at TheStreet Ratings' take on some of these stocks.
TheStreet Ratings team rates NETFLIX INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate NETFLIX INC (NFLX) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 7.9%. Since the same quarter one year prior, revenues rose by 25.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Powered by its strong earnings growth of 134.69% and other important driving factors, this stock has surged by 72.21% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- NETFLIX INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, NETFLIX INC increased its bottom line by earning $1.85 versus $0.29 in the prior year. This year, the market expects an improvement in earnings ($3.88 versus $1.85).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Internet & Catalog Retail industry. The net income increased by 141.0% when compared to the same quarter one year prior, rising from $29.47 million to $71.02 million.
- The gross profit margin for NETFLIX INC is currently very high, coming in at 81.65%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 5.29% is above that of the industry average.
- You can view the full analysis from the report here: NFLX Ratings Report
TheStreet Ratings team rates ADVANTAGE OIL & GAS LTD as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate ADVANTAGE OIL & GAS LTD (AAV) a SELL. This is driven by multiple 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 unimpressive growth in net income and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- 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 Oil, Gas & Consumable Fuels industry. The net income has significantly decreased by 1436.7% when compared to the same quarter one year ago, falling from -$4.98 million to -$76.51 million.
- Net operating cash flow has decreased to $29.45 million or 49.21% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, ADVANTAGE OIL & GAS LTD's return on equity significantly trails that of both the industry average and the S&P 500.
- ADVANTAGE OIL & GAS LTD 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. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, ADVANTAGE OIL & GAS LTD continued to lose money by earning -$0.02 versus -$0.54 in the prior year.
- AAV's debt-to-equity ratio is very low at 0.17 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.21 is very weak and demonstrates a lack of ability to pay short-term obligations.
- You can view the full analysis from the report here: AAV Ratings Report
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.