NEW YORK (TheStreet) -- Good morning traders!
1. First, let's look at the software company that created AutoCAD -- Autodesk. Autodesk traded big on Friday, closing up 8.05% to $51.67 per share.
- Friday's range: $49.61 - $52.07
- 52-week range: $33.01 - $58.68
- Friday's volume: 7,642,790
- 3-month average volume: 3,071,810
Autodesk is up 55% from the 52-week low, and the company had a big day on Friday, following a stellar earnings report on Thursday. On Friday there was above average volume, and price action gapped up due to after-market trading on Thursday and Friday premarket trading.
Before earnings, Autodesk was trading flat for the past month or so, after a slight downtrend. The month-long consolidation period was broken on Friday by the big gap up.
Today we will likely see some profit-taking and a little consolidation for the next few days. I'd set a stop just below Friday's low of $49.61, or as low as the 50-day simple moving average at $48.76. There is overhead resistance at roughly $52.55, $53.54, $54.72, and then again at the 52-week high of $58.68. The most compelling resistance is at the $53.54 level, so watch for a little consolidation there, and even a little pullback.
Watch for continued strength and interest today to confirm the positive sentiment. For now, target the 52-week high, which is almost 12% from Friday's close. Stay long until you see a confirmed sell signal and a close below the t-line.
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2. Next, let's look at Applied Materials, which provides manufacturing equipment, services and software to the semiconductor, flat panel display, solar photovoltaic (PV) and related industries worldwide.
Applied Materials trade up 8.13% on Friday to $20.21 per share.
- Friday's range: $19.41 - $20.29
- 52-week range: $14.34 - $21.16
- Friday's volume: 38,042,120
- 3-month average volume: 14,633,500
Applied Materials also had a big day on Friday after reporting earnings on Thursday. Investors swarmed to get into the stock on Friday in exceptional volumes, pushing the price well over near-term resistance levels.
Applied Materials' shares are up over 40% since the 52-week low of $14.34, and up 15% in 2014. The company has been in a consolidation period over the last month, and Friday's price action gapped well over the consolidation highs, confirming a breakout.
We will need to see continued strength today with positive trading or with an inside day.
The 52-week high of $21.16 is the next overhead resistance, and is a very long-term resistance level. So, look to hold this position through the consolidation at that level.
I'd set a stop at the 50-day simple moving average at $19.45, and target the top of the current trend channel. Let this trade work and give it time -- this isn't a get-rich-quick pick. Stay long until you see a confirmed sell signal, or a confirmed close below the t-line. A close below the t-line isn't enough to close this trade. Wait for the following day's candle to be formed to confirm the sell signal.
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3. Next up is Catamaran, which provides pharmacy benefit management services and health care information technology solutions to the health care benefits management industry in North America.
Catamaran traded up 1.21% on Friday, closing at $42.81 per share.
- Friday's range: $42.20 - $42.85
- 52-week range: $36.98 - $58.73
- Friday's volume: 1,349,734
- 3-month average volume: 2,869,620
Catamaran is a rounded bottom breakout, as it closed over the 50-day simple moving average. Price action closed over the 50 on Tuesday of last week, and failed to confirm on Wednesday and Thursday, but closed over the 50 on Friday.
We need to see confirmation today with more positive trading above the 50, and increased volumes on the breakout. The level it's trading at now is a long-term resistance level, so when the breakout does occur, it should have some strength behind the move. Rounded bottom breakouts are in downtrends by default, so confirmation of the breakout is very important.
There is overhead resistance at $44.35, $45.69, and again at the 200-day simple moving average of $47.95. I would target the 200-day simple moving average, which is 12% to the upside.
Last time Catamaran did a rounded bottom breakout, shares traded up 12% and traded to the 200, then returned to the previous downtrend, so watch out for that at the 200. I'd set my stop at $41.72, below the 34-day exponential moving average.
Stay long until you see a confirmed sell signal, or a close below the t-line.
Good luck traders!
"Everything possible today was at one time impossible. Everything impossible today may at some time in the future be possible."
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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.