Big Swing Trade Ideas for Friday, May 16

NEW YORK (TheStreet) -- Good morning, traders!

It's Friday -- expiration day! According to the Stock Traders Almanac, the Dow has been down the last 14 of 24 years on this day. A lot of traders take profits on Friday, so I've found that there is always a fair amount of selling on Fridays.

Without further ado, today's picks are RealPage (RP), Sprint (S) and Walter Investment Management (WAC).

1. First let's look at RealPage, which provides on-demand software solutions for the rental housing industry in North America.

The company offers property management tools. Among those are OneSite, which serves the specific needs of conventional multi-family housing, affordable housing and urban development (or HUD), affordable tax-credit housing, rural housing, privatized military housing, student housing and commercial sectors. Another service is Propertyware, for accounting, maintenance and work order management, marketing spending management and portal services, as well as screening, renter's insurance and payment solutions.

RealPage trade up 1.23% on Thursday to $18.96 per share.

  • Thursday's range: $18.37 - $19.14
  • 52-week range: $15.40 ;- $26.34
  • Thursday's volume: 429,220
  • 3-month average volume: 803,129

RealPage reported excellent earnings on May 6, and has been trading up almost 10% since.

RealPage is a rounded bottom breakout, so by default it is in a downtrend. Yesterday, the chart formed a bullish engulfing signal, and will likely trade higher today. There was a gap down on Feb. 25, and the gap is acting as resistance. The gap resistance levels are from $16.03 to $20.66.

The good news is that gaps always are filled eventually. There is near-term resistance at yesterday's high at $19.14, which will act as a breakout level.

A good entry would be just above the t-line at $18.64 to yesterday's close of $18.96. I'd set a stop at $18.30, just below the 34-day exponential moving average. My first target would be the 200-day simple moving average, which is almost 12% from yesterday's close.

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

2. Next let's check out Sprint, the phone company.

Sprint traded up on Thursday 6.01% to $9.53 per share.

  • Thursday's range: $9.00 - $9.66
  • 52-week range: $5.61 - $11.47
  • Thursday's volume: 39,296,444
  • 3-month average volume: 15,900,600

Sprint had a big day yesterday and is near a breakout level of about $9.60.

Sprint beat estimated earnings on April 29, and has traded up 25% since earnings were reported. That's lucky for those who bought at the bottom!

We need to see continued strength today, but Sprint may pull back a little, due to normal Friday profit-taking. A pullback will offer us a better entry price. A good entry would be anywhere above $9 and below yesterday's close of $9.53, or an inside day entry. Start with a 1/4 position and add to the position on the breakout above $9.60.

I'd set a stop below yesterday's low, say about $8.90. Target the 52-week high of $11.47, which is about 17% to the upside. There is resistance at $9.79, then again at the gap down that occurred on Jan. 3. The gap down resistance levels are $10.03 to $10.40.

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

3. Next, let's see about Walter Investment Management, which together with its subsidiaries provides business services to the residential mortgage industry in the U.S.

WAC traded down on Thursday 1.74% to $28.81 per share.

  • Thursday's range: $27.71 - $29.08
  • 52-week range: $24.00 - $45.12
  • Thursday's volume: 1,330,776
  • 3-month average volume: 1,123,500

Walter more than doubled its estimated earnings, it reported last week. It had a huge day following that report, up 16.5%. Then it trade up a couple days, and profits were taken, gapping down on Wednesday. The gap down tested the bulls, and I believe the bulls prevailed, trading back over the t-line.

One problem is Jefferies' downgrade of the stock today.

There is resistance to $29.30 from the gap down, which has also been resistance for the last few months. The next overhead resistance levels are at $30.23, $30.78 and $33.20.

We need to see continued strength today and look for an entry above the t-line, at $28.64. Start with a 1/4 position and add to the position at the breakout above $30.65.

I'd set a stop at yesterday's open of $28.17. Stay long until you see a confirmed sell signal or a close below the t-line.

Good luck traders, and happy Friday!

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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.

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