Long Swing Picks After the Memorial Day Weekend: Isis, Tibco, More

NEW YORK (TheStreet) -- Good morning traders!

Today's picks are Isis Pharmaceuticals (ISIS), the Medicines Company (MDCO) and Tibco Software (TIBX).

1. First, let's look at Isis Pharmaceuticals, which is engaged in the discovery and development of "antisense" drugs. The company's flagship product is the Kynamro injection, an apo-B synthesis inhibitor for patients with homozygous familial hypercholesterolemia and for the reduction of low-density lipoprotein cholesterol. Isis also has a pipeline of 31 drugs in development for the treatment of various diseases, including cardiovascular and metabolic diseases as well as severe and rare diseases, including neurological disorders and cancer.

Isis had a huge day on Friday, trading up 11.46% to $27.81 per share. The stock opened higher Tuesday, and was up nearly 8% at $30 as of 10:30 a.m.

  • Friday's Range: $25.82 - $27.92
  • 52-week range: $20.41 - $62.66
  • Friday's volume: 4,585,923
  • 3-month average volume: 2,568,050

Isis looks good from a technical standpoint, as it closed over the 20-day simple moving average for the first time since March. Yet Isis has been having trouble recently, and is down over 50% from its 52-week high that it reached on February 24.

The chart has formed a bullish signal known as a double bottom, and has reached the breakout level. Plus, trading volume has increased over the last 5 trading days, which shows positive investor sentiment.

Watch for increased interest in Isis on Tuesday, and continued trading over the 20. A good entry is anywhere between $25.46 and Friday's close of $27.81. Since Isis is in a downtrend, I'd set my stop tight, as you can always get back in if the trade is working in your favor. I'd set my stop below the t-line, which is at $25.25.

There is overhead resistance at $31.78, then again at the 34-day exponential moving average at $33.99. I'd set my first target just below the 34 EMA at, say, $33.00, which is 18% to the upside. My next target would be the 200-day simple moving average, 35% to the upside.

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

2. Next, let's look at the Medicines Company, which provides medical solutions for patients in acute and intensive care hospitals worldwide.

The Medicines Company traded positive on Friday, closing up 5.30% to $27.24 per share. Tuesday the stock was up nearly 3% to $28 as of 10:30 a.m.

  • Friday's Range: $25.76 - $27.44
  • 52-week range: $23.53 - $41.28
  • Friday's volume: 739,551
  • 3-month average volume: 1,003,480

The Medicines Company is a rounded bottom breakout, my favorite chart pattern. The rounded bottom breakout is an attempt to catch a falling knife. Medinicines is in a moving average squeeze -- the averages are all "squeezed" together.

Friday's candlestick engulfed all of the major moving averages, the t-line, the 20 SMA, the 34 EMA, and the 50 SMA, which is a bullish signal. Plus, Friday's candle closed a gap down that occurred on April 1. Watch for continued bullish strength on Tuesday, with increasing volume to enter this trade.

There is overhead resistance at about $30 and again at $30.60, so watch for consolidation at these levels, or you could exit the trade at this level for about 10%. Other than that there isn't much resistance between Friday's close and the 200-day simple moving average. With that, I'd target the 200-day simple moving average for an 18% move to the upside. I'd set a stop at $24.85, as I wouldn't want price action to go below this level.

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

3. Next, let's look at Tibco Software, which provides infrastructure and business intelligence software worldwide. The company offers products for integration and core infrastructure, business optimization and process automation and collaboration.

Tibco traded positive on Friday, closing up 1.37% to $20.05 per share. By Tuesday at 10:30 a.m., the stock had jumped almost 6% to $21.25. 

  • Friday's Range: $19.67 - $20.15
  • 52-week range: $18.65 - $27.15
  • Friday's volume: 1,188,305
  • 3-month average volume: 2,370,380

Tibco is also a rounded bottom breakout, and on Friday shares closed over the 50-day simple moving average. Tibco was a failed rounded bottom breakout in March, so watch this trade closely. Price action has been moving up since reaching its 52-week low of $18.65, and is up 7% from that low.

This trade needs confirmation on Tuesday, with continued trading over the 50, as well as a close over the 50. Friday's close was at a strong long-term resistance level, so again, this trade needs confirmation. Look for increased volume on the breakout, and continued bullish strength above Friday's close of $20.05.

There is overhead resistance at $20.82, $21.17, $21.52, $22.43 and again at the 200-simple moving average. I'd target just below the 200 at about $22.50, which is 12% to the upside from Friday's close. I'd set a stop at about $19.49. If it trades below this level, it will likely continue the current downtrend.

Let the trade work -- give it time to work -- and stay long until you see a sell signal or a close below the t-line.

"I'm not nearly so concerned with the return on my capital as I am the return of my capital".
--Will Rogers

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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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