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.

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