Three Swing Trade Ideas for Thursday, May 29

NEW YORK (TheStreet) -- Today's swing trade ideas are Quality Systems (QSII), SouFun Holdings (SFUN) and Shutterfly (SFLY).

1. First, let's look at Quality Systems, which develops health care information systems used to automate medical and dental offices.

Quality Systems traded positive on Wednesday, closing up 0.88% to $17.14 per share.

  • Wednesday's range: 16.74 - 17.16
  • 52-week range: 14.10 - 24.15
  • Wednesday's volume: 778,964
  • 3 month average volume: 472,363

Quality Systems looks good from a technical standpoint as it confirmed a rounded bottom breakout on May 22 and broke out on May 23. Then it had a small pullback before earnings.

The company reported earnings this morning, which were less than it had predicted, but the chart still looks good. The chart is in the oversold condition and is starting to consolidate at the current price level, which is at a long-term resistance level.

The next breakout level is at about  $17.50-$17.60, and so watch for increasing volume at that level. Volume has been increasing over the last four trading days and shows positive investor sentiment on the breakout.

A good entry level is anywhere above the t-line at $16.38. I'd set a stop at about $16.10, as I wouldn't want to see price action dip to that level.

There is overhead resistance at $17.26, $17.50, $17.98, $18.42 and again at the 200-day simple moving average at $19.59. I would target the 200-day simple moving average, which is +14% to the upside.

Stay long and let the trade break through this tough level, as it's had a hard time breaking above this level before. Let it ride, and stay long until you see a confirmed sell signal, or a close below the t-line.

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