Big Swing Trade Ideas for Thursday, May 1

NEW YORK (TheStreet) -- Happy May Day! According to the Stock Traders Almanac, May 1 has been bullish 12 years out of the last 16. The investing maxim of "sell in May and go away" is attributed to John L. Person -- but I think he meant later in May, not in the first week. 

It is earnings season, and many companies are reporting today. Some notable ones are Exxon Mobil (XOM), Kellogg (K), Mastercard (MA) and Motorola (MSI).

With so many companies reporting, there is a lot of movement in the market, so without further ado....

Today's top swing picks are Rite Aid (RAD), nTelos Holdings (NTLS) and Grupo Financiero Santander Mexico (BSMX).

1.  My first pick is Rite Aid, which operates a chain of retail drugstores in the U.S. Rite Aid traded positive yesterday and closed up 2.96% to $7.30 per share.

  • Wednesday's range: 6.97 - 7.32
  • 52 week range: 2.47 - 7.39
  • Wednesday's volume: 41,050,218
  • 3 month average volume: 24,395,200

Rite Aid's chart looks pretty rad, as we say in California. The stock has been in a major uptrend since December 2012. There have been some pretty major pullbacks in that time, but it never really traded below the 100-day simple moving average, and only tapped it three times in the last two years. So you could stand back and see that this is a solid trend, that has no sign of stopping.

Rite Aid reported positive earnings on April 10, and as a result, shares gapped up and traded to their 52-week high at $7.39. Investors took profits on that gap up, and shares have been consolidating since then. Yesterday the stock formed a bullish kicker-type signal, with waxing volumes for the last two trading days. These are signs that shares will trade higher, and the trend will continue as it has for years.

I'd set a stop at $6.73, and stay long with the trend until you see a confirmed sell signal or a confirmed close below the t-line. There is no real resistance to speak of, so target the moon. Remember that charts will move up and down. Let the trade work. This chart is the perfect example of this.

2.  My next pick is nTelos Holdings. Through its subsidiaries, nTelos provides digital wireless communications services to consumers and businesses in Virginia and West Virginia, as well as parts of Maryland, North Carolina, Pennsylvania, Ohio and Kentucky. nTelos traded positive on Wednesday, closing up 3.30% to $13.79 per share.

  • Wednesday's range: 13.09 - 13.80
  • 52 week range: 12.32 - 23.03
  • Wednesday's volume: 451,767
  • 3 month average volume: 464,895

nTelos is a "rounded bottom breakout." This chart pattern has huge gain potential. nTelos appeared on my scanner yesterday when it was trading over the 50-day simple moving average. Today we need to see confirmation. With rounded bottom breakouts, we need to see follow-through. One criterion is that the chart needs to be in a downtrend. The bigger the trend, the better gain potential on a reversal.

I recommend nTelos because it is 27% under the 200-day simple moving average. Traders should target that 200-day simple moving average at $17.45. There is resistance at $14.15, $15.35 and $16.12, so watch for consolidation at these levels. Even a little pullback is fine. I'd set a stop just below Tuesday's low at $12.82. 

nTelos is reporting earnings on May 7, so be watchful of that. I don't hold over earnings, but do as you see fit. Stay long until you see a confirmed sell signal or a close below the t-line.

3.  The next pick is Grupo Financiero Santander Mexico, which provides banking services in Mexico. Its deposit products include current checking accounts, savings accounts and time deposits, as well as certificates of interbank deposit. Santander traded positive on Wednesday, closing up 2.59% to $11.90 per share.

  • Wednesday's range: 11.09 - 11.99
  • 52 week range: 10.02 - 17.77
  • Wednesday's volume: 4,361,655
  • 3 month average volume: 2,176,790

Santander reported earnings on April 29, and shares traded positive as a result. Yesterday, a bullish engulfing signal was formed. As with all chart patterns, we need to see confirmation the following days. Yesterday's candle is also a moving average squeeze, which means that the candlestick engulfed the major moving averages. That's a bullish buy signal.

Shares closed right at a resistance level yesterday. The next resistance levels are at about $12.10 and at the recent high of $12.30. Target the 200-day simple moving average, a 10% move. You aren't going to get that return stuffing your money under the mattress.

I'd set a stop at yesterday's low at $11.09, as I wouldn't want it to trade below that level.

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

Good luck out there!

"Your time is limited, so don't waste it living someone else's life."

-The late, great, Steve Jobs

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.

Disclaimer: This site may include market analysis. All ideas, opinions, and/or forecasts, expressed or implied herein, information, charts or examples contained in the forecasts are for informational and educational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise.

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