Big Swing Trade Ideas for Wednesday, May 14

NEW YORK (TheStreet) -- Today let's look at Newcastle Investment (NCT), Hornbeck Offshore Services (HOS) and Sirius XM Holdings (SIRI).

First, Newcastle a company that operates as a real estate investment trust. Its stock traded positive on Tuesday, closing up 2.42% to $4.66 per share.

  • Tuesday's range: 4.53 - 4.67
  • 52-week range: 3.95 - 5.04
  • Tuesday's volume: 4,556,287
  • Three-month average volume: 4,090,290

Newcastle became a "rounded bottom breakout" when it closed over the 50-day simple moving average yesterday. The stock has been in a short-term uptrend since the company reported earnings.

Yesterday, shares closed over near-term resistance levels and over the major moving averages. We'll need to see continued strength today. There is some overhead resistance at $4.81, and then again at the gap down that occurred on Feb. 14.

The gap resistance starts at $4.98 and goes all the way to $5.75, but the rule of gaps is that they always close.

I am long Newcastle as of yesterday. I'd suggest an entry anywhere over the 50-day simple moving average, above $4.61. I'd set my stop at about $4.50, which is just below the 20-day simple moving average. My first target is the 200-day simple moving average, which is almost 14% higher than yesterday's close. Next, target the top of the gap down at $5.75, which is almost 19% higher from yesterday's close.

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

2. Next let's look at, Hornbeck, which through its subsidiaries operates offshore supply vessels.

Hornbeck traded positive on Wednesday, closing up 1.79% to $42.14 per share.

  • Tuesday's range: 41.49 - 42.43
  • 52 week range: 37.44 - 59.93
  • Tuesday's volume: 1,415,268
  • 3 month average volume: 653,814

Hornbeck is also a rounded bottom breakout, which occurred on Monday, and confirmed yesterday when it continued to trade over the 50-day simple moving average.

Yesterday formed a bullish kicker signal and traded strongly, and closed above near term resistance.

There is more overhead resistance at $43.53 abd then again at $44.50. There are a few small gap downs that will act as resistance, and so expect some consolidation on the upswing. The chart has been forming a "W" pattern, or a double bottom, which indicates that the bottom has formed and is not likely to trade lower.

Target the 200-day simple moving average at $48.75, which will be a 15% move from yesterday's close. I'd set a stop around $40, and wouldn't want to see it trade below this level. Stay long until you see a confirmed sell signal or a close below the t-line.

3. Finally is Sirius XM, which provides satellite radio services.

Sirius traded positive on Tuesday, closing up 2.19% to $3.27 per share.

    • Tuesday's range: 3.20 - 3.29
    • 52 week range: 2.98 - 4.18
    • Tuesday's volume: 68,881,557
    • Three-month average volume: 67,560,500

Sirius has had a tough time in the recent past, but yesterday, the stock traded positive. Sirius is a rounded bottom breakout since it closed over the 50-day simple moving average yesterday.

The stock looks to be turning around, but protect yourself since it is in a downtrend. I would target the 200-day simple moving average, and set a stop at about $3.20.

The 200-day simple moving average is 10% from yesterday's close. There are positive rumors around Sirius that could make this thing go crazy, and so be watchful.

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At the time of publication, the author was long on Newcastle.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

The author holds a position in NCT, but not in any other stocks mentioned in this article.

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