Top Swing Trade Ideas for Monday, June 16: Cree, Isis, More

NEW YORK (TheStreet) -- Good day, traders!

Today's swing pick ideas are Cree (CREE), Financial Engines  (FNGN) and Isis Pharmaceuticals  (ISIS).

1. First let's look at Cree, which develops, manufactures and sells lighting-class light emitting diodes, lighting and semiconductor products for power and radio-frequency applications. The company sells its LED, RF and other products in the U.S., China, Europe, South Korea, Japan, Malaysia and Taiwan.

Cree traded up 5.01% on Friday, closing at $49.66 per share. 

  • Friday's range: $47.21 - $49.72
  • 52-week range: $44.52 - $76.00
  • Friday's volume: 3,559,952
  • 3-month average volume: 2,261,470

Cree is a rounded bottom breakout after Friday's close above the 50-day simple moving average. Shares traded lower during the month of April, then consolidated through most of May. By the end of May, the price action was trading above the bottom that had formed during the consolidation period.

Once shares traded above the 20-day simple moving average, that became a support level, and price action consolidated above the 20. On Wednesday, the chart formed a bullish piercing signal off the 20-day simple moving average, and didn't confirm until Friday when the price action moved up over 5%.

Cree is also forming a cup and handle chart pattern, which get its name for looking like a coffee mug with a handle.

I would look to enter this trade above the 34-day simple moving average, which is at $48.56. I would set a stop at $46.90-ish, which is just below the recent consolidation levels. I would target the 200-day simple moving average, at $58.03, which is almost 17% to the upside.

There isn't much resistance between Friday's close and the 200-day simple moving average. The only resistance to speak of is at the gap-down price of $53.05 to the 200.

I'd start with a one-quarter position, and add to the position on strength and on confirmation of the breakout.

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

Next up: Financial Engines and Isis Pharmaceuticals.

2. Now let's look at Financial Engines, which provides independent, technology-enabled portfolio management services, investment advice and retirement income services to participants in employer-sponsored defined-contribution plans in the U.S.

Financial Engines traded up 2.38% on Friday, closing at $47.25 per share.

  • Friday's range: $45.31 - $47.38
  • 52-week range: $37.14 - $71.08
  • Friday's volume: 396,698
  • 3-month average volume: 569,165

Financial Engines was a rounded bottom breakout on Friday, June 6, and has been confirming and consolidating since. On Friday, the ultimate confirmation happened when the 34-exponential moving average crossed over the 50-day simple moving average. Plus, price action moved over the recent consolidation levels. Additionally, volume is increasing on the upswing, which tells us that the investor sentiment is behind the bullish move.

Now we should look for the breakout.

I'd look for an entry as cheap as possible, anywhere between the 50-day simple moving average at $43.74, to Friday's close at $47.25. I'd set a stop at about $41.20, which is at the bottom of a gap-up that happened on June 5. I'd target the 200-day simple moving average at $56.23, which is almost 19% from Friday's close.

There is overhead resistance at $47.70, $49.69, $53.05, and then again at the 200-day simple moving average, so let it consolidate at these levels.

Stay long until you see a confirmed sell signal or a close below the t-line. Before exiting the trade, ask yourself, "Would I buy at this level?" This question has kept me from selling prematurely on countless occasions.

3. Lastly, we'll look at Isis Pharmaceuticals, which is engaged in the discovery and development of antisense drugs using a novel drug discovery platform.

Isis traded up 4.31% on Friday, closing at $33.63 per share. 

  • Friday's range: $31.34 - $33.70
  • 52-week range: $20.52 - $62.66
  • Friday's volume: 2,727,307
  • 3-month average volume: 2,743,820

Isis is back on the buy list, as it formed a  bullish engulfing signal on Friday at a support level. I recommended Isis as a buy on May 27, and the stock has traded up almost 17% since then.

Now, there was a little pullback which offered us an opportunity to add to the position. On Tuesday of last week there was a doji gap-up, which has huge bullish  implications, so look for this trade to continue to break. (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.) Plus, the 34-day exponential moving average crossed over the 50-day moving average on Friday, confirming the continuation.

This trade is going places, so don't be left behind.

I'd look for an entry on any strength, anywhere above the 50, which is at $30.18. I'd set a stop below the upward channel, as low as the 20-day simple moving average at $28.90. My first target would be the 200-day simple moving average, at $37.87, which is 12.5% from Friday's close. This trade will likely trade well above the 200, so maybe just take partial profits there, and look to add to the position on the next pullback. 

The next target would be at the next resistance level, at about $39.66, then $41.64, and so on. Stay long until you see a confirmed sell signal or a close below the t-line.

Come see me at my second home and sign up for the two-week trial. You'll find a trading room with tons of professional traders who help each other learn and succeed.

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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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