Top Swing Trade Ideas for Wednesday June 11: Facebook, Vivus, More

NEW YORK (TheStreet) -- Good day traders!

Today's top picks are Facebook  (FB), Vivus  (VVUS) and Wageworks (WAGE).

1. First, let's look at Facebook, the social media giant that has changed how more than 1.2 billion people spend their day.

Facebook traded positive on Tuesday, closing up 4.6% to $65.77 per share. 

  • Tuesday's range: $63.50 - $65.82
  • 52-week range: $23.26 - $72.59
  • Tuesday's volume: 68,490,394
  • 3-month average volume: 66,285,200

Go check your news feed, update your status, take a picture of what you are having for lunch, then take a selfie of you buying shares of Facebook.Today the stock is a top pick.

Facebook has been trading sideways since March, after a short downtrend. Even after reporting positive earnings, the stock still faltered and didn't really go anywhere. There have been trading opportunities in Facebook during this sideways action, but I prefer to get it on breakouts.

Yesterday, price action moved above the sideways levels. Now the stock is poised to break out.

The sideways channel lets us know that investors aren't going to let the shares trade any lower. The chart formed a triple bottom, testing the lows, and formed many bullish candles along the way. There was a bullish engulfing signal, followed by more bullish engulfing signals. Then there was consolidation at the top of the trend channel. Yesterday was a doji gap up -- 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.)

After an almost 5% upside day, shares will likely consolidate a bit. The next overhead resistance is at $67, $69.71 then again at the 52-week high of $72.59. I would set a stop at about $61.50, just below the recent consolidation levels. I'd like to get an inside day entry, meaning within yesterday's price action range, so I can get it at a cheaper price.

I would target the 52-week high to start, and stay long until you see a sell signal that the stock is turning around. If you are a t-line trader, get solid confirmation before exiting the trade.  

Next up: Vivus and Wageworks.

2. Next, let's look at Vivus, a biopharmaceutical company. Vivus develops and commercializes therapies to address unmet needs in obesity, sleep apnea, diabetes and sexual health in the U.S. and the European Union.

Vivus traded positive on Tuesday, closing up 0.19% to $5.21 per share. 

  • Tuesday's range: $5.19 - $5.33
  • 52-week range: $4.56 - $15.40
  • Tuesday's volume: 1,520,688
  • 3-month average volume: 3,093,960

Vivus is a rounded bottom breakout that has confirmed over the last few days. It has now consolidated above the 50-day simple moving average.

The last two days have been dojis, which is a sign of indecision. Dojis are a sign for me to watch the chart and look for a break in either direction. Dojis are a battle for dominance, so watch for the winning rally after the doji. Plus, the chart formed a cup-and-handle chart pattern, which is a huge bullish candlestick signal. That means the stock has a high probability of high gains.

Look for positive trading today and buy on strength. I would look for an entry around the 50-day simple moving average at $5.13. There is overhead resistance at $5.58, $5.95, and again at a gap down that occurred back in February, the gap down levels are $5.77 to $6.75, so watch for consolidation at these levels.

I would target the 200-day simple moving average at $7.93, which is over 50% to the upside. Now that is a great trade. Start with a one-quarter position and add to the trade on strength. Stay long until you see a confirmed sell signal, or a close below the t-line.

Let the chart work, and don't be afraid to secure profits on the upswing.

3. Now let's look at Wageworks, which provides tax-advantaged consumer-directed benefits programs to employees in the U.S. It offers employer-sponsored flexible spending accounts, which enable employees to set aside pretax dollars to pay for eligible health care expenses like co-pays, deductibles and over-the-counter medical products, as well as vision expenses, orthodontia, medical devices and autism treatments.

Wageworks traded positive on Tuesday, closing up 0.58% to $44.77 per share.

  • Tuesday's range: $43.56 - $44.79
  • 52-week range: $29.25 - $68.31
  • Tuesday's volume: 242,002
  • 3-month average volume: 362,994

Wageworks looks good from a technical standpoint, as it is also a rounded bottom breakout. The chart was downtrending, then found its bottom around $37. It consolidated and rode that level for a couple weeks. This tells us that shares aren't going any lower. Plus, the chart formed a bullish hammer/bullish engulfing signal at the bottom, then retested that level. Shares have been trading positive for the last 5 trading days, so we'll likely see consolidation above the 50-day simple moving average as it creates another bottom. There is also a cup-and-handle chart pattern, which has confirmed. All good bullish signs.

There is relatively light volume on this stock, so keep an eye on it. I'd look for an entry above the 50-day simple moving average, and try to get in at the cheapest price possible. There is overhead resistance at $45.94-ish, $47.85, $50.16 and again at the 200-day simple moving average at $52.85. I would target the 200 for 17% potential to the upside. I'd set my stop $41.69, which is just below recent support levels.

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

Good luck traders!

Some recent recommendations that are still working are Ford (F), General Motors (GM), Newcastle Investments (NCT), Meritor (MTOR), Autodesk (ADSK), Medicines Company (MDCO), Realpage (RP), Mobile Telesystems (MBT) and Apple (AAPL), to name a few.

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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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