Swing Trade Ideas for Tuesday, June 10: Home Inns, Westport, More

NEW YORK (TheStreet) -- Good day traders!

Today's top swing pick are Home Inns & Hotels Management  (HMIN), Westport Innovations  (WPRT) and Weight Watchers International  (WTW).

1. First, let's look at Home Inns & Hotels Management, which develops, leases, operates, franchises and manages economy hotels under the Home Inn, Yitel and Motel 168 brands in the People's Republic of China.

Home Inns traded up 3.79% on Monday, closing at $31.80 per share. 

  • Monday's range: $30.52 - $31.84
  • 52-week range: $23.93 - $44.17
  • Monday's volume: 225,412
  • 3-month average volume: 346,939

Home Inns is a rounded bottom breakout chart pattern. This chart triggered as a rounded bottom breakout on May 27, and has been confirming since. The stock is staying just above the 50-day simple moving average. Yesterday it formed a nice large bullish candle and closed above the previous days closes.

Look for price action to move higher today and close higher on the breakout.

Home Inns reached its six-month low on May 7, and has traded up almost 20% since then. Now shares are consolidating on the 50-day simple moving average, forming a base to work from. The 50 is acting as a solid support.

Look to enter this trade above the 20-day simple moving average -- anywhere within yesterday's range of $30.52 to $31.84. I'd set a stop at about $29.70, or if you'd like it a little tighter, I'd set it just below the 50.

I would target the 200-day simple average at $35.38, and let the trade work on its way up. There is 10% potential gain to the 200 from yesterday's close. Expect some consolidation and dips on the uptrend. Pullbacks and dips are great opportunities for adding to your positions. Start with a 1/4 position, and add to it as the trend is working.

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

2. Next, let's look at Westport Innovations, which provides low-emission engine and fuel system technologies utilizing gaseous fuels.

Westport traded up 4.02% on Monday, closing at $15.25 per share.

  • Monday's range: $14.62 - $15.39
  • 52-week range: $12.42 - $35.40
  • Monday's volume: 749,362
  • 3-month average volume: 997,584

Westport is a great chart and has been consolidating for the last month or so. The stock is a semi-failed rounded bottom breakout. On May 2, there was huge bullish sentiment, and the chart formed a huge bullish candlestick. Plus, price action gapped up after a doji -- this is known as the "trader's best friend." (A doji chart has a stock price that opens and closes in almost the same spot, but it may be wide-ranging in price over the course of the day.)

That huge bullish candle is still the main feature on this chart. Profits have been taken, though, and the breakout has been tested. Yesterday was another doji gap up, so shares will likely trade higher today.

I would look for the cheapest entry on this chart, as low as $14.48 or even lower. I would put a stop below the little double bottom that has formed in the last few weeks, at say $14. Then, as with all rounded bottom breakouts, target the 200-day simple moving average, which is at $19.55. The 200 is 28% to the upside from yesterday's close. That is great potential for a relatively inexpensive stock.

This kind of potential is why I trade the rounded bottom breakout.

There is overhead resistance at $15.74, $16.27, $17.24 and then again at the 200. Target the 200 and take some profits there. If the trade is still working at the 200, stay long, and let the trade keep working. 

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

3. Lastly, let's look at Weight Watchers International, which provides weight management services in North America, the U.K., Continental Europe, Australia, New Zealand and some other countries.

Weight Watchers traded up 1.61% on Monday, closing at $22.12 per share.

  • Monday's range: $21.61 - $22.13
  • 52-week range: $19.50 - $48.63
  • Monday's volume: 732,234
  • 3-month average volume: 919,442

Weight Watchers is also a rounded bottom breakout. It has been riding the 50-day moving average since the beginning of May. That tells us that the bottom has formed and price action isn't likely to trade lower. There are also increasing volumes with the bullish moves over the last few days. 

Weight Watchers reported excellent earnings back in April and gapped up huge, then traded back down due to profit-taking. Now look for increasing volume and continued trading above yesterday's close.

There was a gap down back in February which will act as resistance on the upswing. The gap down levels are $23.09 to $29.56, and all gaps eventually get closed. The moving averages are in a squeeze right now, which means they are all stacked on top of each other.

I would look for an entry above the moving averages, say $21.25. I'd set a stop below the recent lows at about $20.45. I would target the 200-day simple moving average at $29.01, which is 23% to the upside.

Stay long until you see a confirmed sell signal or a close below the t-line. But remember that a close below the t-line doesn't mean you should close the position. You must take all the pieces of the chart into consideration and let the signals confirm before taking a loss. Let the trade work, and ask yourself if you would buy it at this level before closing the trade.

Good luck traders!

>>Read More:

Fusion-io Q&A: Apple, Facebook, Merger Speculation

Apple and Nintendo: A Match Made in Purgatory

Apple Still Headed to $1,000

Super Mario Gabelli of Gamco Is King of M&A, as Hillshire Deal Shows

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.

If you liked this article you might like

Homeinns Hotel Group (HMIN) Highlighted As Strong And Under The Radar Stock Of The Day

Homeinns Hotel Group (HMIN) Highlighted As Strong And Under The Radar Stock Of The Day

Today's Strong And Under The Radar Stock: Homeinns Hotel Group (HMIN)

Today's Strong And Under The Radar Stock: Homeinns Hotel Group (HMIN)

Today's Strong And Under The Radar Stock Is Homeinns Hotel Group (HMIN)

Today's Strong And Under The Radar Stock Is Homeinns Hotel Group (HMIN)

Homeinns Hotel (HMIN) Downgraded From Buy to Hold

Homeinns Hotel (HMIN) Downgraded From Buy to Hold