NEW YORK ( TheStreet) -- Today's top swing-trade picks are Sears Holdings ( SHLD), J.C. Penney ( JCP) and Prosensa Holding N.V. ( RNA).
First pick is Sears. The company operates as a retailer in the United States and Canada.
SHLD traded positive on Monday, closing up 4.04% to $43.50 per share.
Monday's range: 41.86 - 44.23
52-week range: 31.26 - 67.50
Monday's volume: 1,657,837
3-month average volume: 1,585,650
SHLD is a "rounded bottom breakout" chart pattern; one of my favorite chart patterns. SHLD traded positive along with other retailers like J.C. Penney, Macy's ( M), Bon-Ton Stores ( BONT) and Kohl's ( KSS). SHLD closed above the 50-day simple moving average on Monday, triggering a buy signal. It is also forming a bullish flag type signal, not textbook, but good enough for me to watch for confirmation on Tuesday. I believe SHLD is a solid buy on positive trading on Tuesday.
SHLD has been in a short-term uptrend after finding its bottom when it reached it's 52-week low on April 14. There was a gap down on April 7, so there is resistance throughout the whole gap, those levels are $40.97 ~ $49.70. Shares have been consolidating for the last few days, so watch for a breakout above the current levels. I would look for an entry above the 50-day simple moving average, and I'd set a stop just below the 20-day simple moving average. My first target would be the 200-day simple moving average, which is just under 10% return. My next target would be the recent highs at around $50 per share, which will be a 15% return.
I would stay long until In saw a sell signal, or a close below the t~line (t~line = 8 EMA).
Next, we have J.C. Penney, through its subsidiary, sells merchandise through department stores in the United States. "Penny's" (without the e), as we used to call it when I was a kid, because you can buy clothes for the whole family for pennies.
J.C Penney trade positive yesterday, closing up a whopping 9.02% to $8.70 per share.
Monday's range: 7.97 - 8.85
52-week range: 4.90 - 19.63
Monday's volume: 34,613,185
3-month average volume: 25,741,400
JCP was a "rounded bottom breakout" back on Feb. 27 when it closed over the 50-day SMA, then traded up nearly 27%, depending on your entry, offering huge gains to investors. Those huge gains happened within a matter of days. After the big jump, shares consolidated, pulled back to test the 50-day SMA, and now is trading back up. JCP has formed a cup-and-handle type signal, which is a pretty reliable signal to trade. Also, it is in a moving-average squeeze, which means that yesterday's candle is engulfing some of the major moving averages.
I would like an entry in the range of $8.29~$8.70. Target the 200-day SMA at about $9.54, then target the recent highs at $10.19ish. There is near-term resistance at about $9, so don't be afraid of a little consolidation at this level. This stock needs to be watched closely, as it is technically still in a long-term downtrend, but it is also in a short term-uptrend. Just set your stops where you feel comfortable, and raise your stops with positive trading, so you can secure your profits.
JCP shares its earnings report on May 15. I personally do not hold any eargning, as strange things happen around earnings, and I'm not willing to risk it.
Next we have Prosensa Holding N.V., a biotechnology company that engages in the discovery and development of ribonucleic acid-modulating therapeutics for the treatment of genetic disorders.
RNA traded positive on Monday, closing up 8.55% to $6.73 per share. A big move for a cheaper stock.
Monday's range: 6.15 - 6.80
52-week range: 3.43 - 34.55
Monday's volume: 509,426
3-month average volume: 277,068
I like RNA for its 55% gain potential. RNA is in its first year of being publicly traded, and traded up roughly 80% after its initial public offering. RNA caught my attention on Friday when shares closed above its 50-day simple moving average. This chart is also a "rounded bottom breakout"; the breakout happened on Friday, but Monday confirmed the breakout. Look for an entry above the 50-day SMA, ideally you'd get an entry inside of yesterdays candle, in the range of $6.15~$6.80. But any positive trading would be a good entry.
There was a ginormous gap down back in September 2013, so there is resistance from the current levels, all the way to $23.29, so keep an eye on it. Target the 200-day SMA,
which should be huge gains of 55%. I would stay long until I saw sell signals, or a close below the t~line (8 EMA).
RNA reports earnings on May 16, so as I said before, I don't recommend holding over earnings, but trade as you feel comfortable.
Good luck traders, as luck favors the prepared!