Swing Trade Ideas for Tuesday, June 24: FireEye, Groupon, More

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

Today's top swing picks are FireEye  (FEYE), Groupon  (GRPN) and UTi Worldwide  (UTIW).

1. First, let's look at FireEye (FEYE), which provides products and services for detecting, preventing and resolving advanced cybersecurity threats.

FireEye traded up 4.16% on Monday, and closed at $39.02 per share.

  • Monday's range: $37.01 - $39.45
  • 52-week range: $25.58 - $97.35
  • Monday's volume: 5,297,922
  • 3-month average volume: 6,726,750

FireEye looks good technically, as it is a rounded bottom breakout -- albeit without the 200-day simple moving average as a factor, since shares have only been publicly traded since Sept. 20, 2013.

Price action traded up 138% in the first five and a half months. The stock has since lost all those gains and is down 3% since the IPO. The share price found a bottom at around $27, and it is now steadily climbing from that bottom.

On Monday last week, price action closed over the 50-day simple moving average and continued to consolidate for the rest of the week. The charts formed a series of dojis. (A doji chart is a one-day chart with a stock price that opens and closes in almost the same spot, but may show a wide price range over the course of the day.) This allowed the moving averages to catch up.

Yesterday, FireEye had a good bullish day of trading, and price action closed over the previous consolidation levels. The stock formed a bullish engulfing signal. Plus, the 34-day exponential moving average crossed over the 20- and 50-day simple moving averages.

I'd look for an entry anywhere above yesterday's low, between $37.01 and $39.45. I'd set my stop below Friday's low of $36.04, as I wouldn't want it to close below this level.

There is overhead resistance at $40.80, $47.23, and $54.97-ish. Remember, resistance is an area rather than an exact price. I would target these resistance levels, with my first target at $47.23, which would be 21% to the upside. After that, I'd target each resistance level.

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

U.S. World Cup Is an Iffy Investment

Here's What We Think We Know About the Next iPad

Up next: Groupon and UTi.

And don't forget to 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.

2. Now let's look at Groupon (GRPN), which operates online local commerce marketplaces that connect merchants to consumers by offering goods and services at a discount worldwide.

Groupon traded up 5.53% on Monday, closing at $6.49 per share.

  • Monday's range: $6.18 - $6.63
  • 52-week range: $5.18 - $12.76
  • Monday's volume: 20,992,651
  • 3-month average volume: 17,487,200

Groupon is also a rounded bottom breakout, since it closed over the 50-day simple moving average yesterday.

Groupon was having a tough time and has traded down 56% since January. The share price gapped down and the stock faced hugely bearish days.

The bears were in control. Now, price action is back on the climb. Groupon's share price is up 22% since May 7. This trade needs to confirm a bit, and hopefully today the price action will pull back a little to offer a better entry.

I'd look for an entry around the t-line at $6.25, but the stock could be a buy on any positive strength. I'd set my stop below Friday's low of $6.12.

As with all rounded bottom breakouts, the ultimate target is the 200-day simple moving average, which is at $9.16. That will be a 41% trade to the upside, and then you won't need to use coupons to buy anything.

Right now, Groupon is offering a coupon on their share price. It's cheap and has potential. Stay long until you see a confirmed sell signal, or a close below the t-line.

The Truth About Rental Cars and Insurance

Dunkin Donuts Preparing to Crush Krispy Kreme in California


Here's a counterpoint from TheStreet Ratings on Groupon:

TheStreet Ratings team rates GROUPON INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate GROUPON INC (GRPN) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet & Catalog Retail industry. The net income has significantly decreased by 846.8% when compared to the same quarter one year ago, falling from -$3.99 million to -$37.80 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Internet & Catalog Retail industry and the overall market, GROUPON INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • Net operating cash flow has significantly decreased to -$20.72 million or 336.49% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The share price of GROUPON INC has not done very well: it is down 19.28% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • GROUPON INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, GROUPON INC reported poor results of -$0.14 versus -$0.10 in the prior year. This year, the market expects an improvement in earnings ($0.11 versus -$0.14).

3. Lastly, lets look at UTi Worldwide (UTIW), which provides non-asset-based supply chain services and solutions worldwide.

UTi traded positive on Monday, closing up 5.05% to $10.19 per share.

  • Monday's range: $9.57 - $10.22
  • 52-week range: $9.00 - $17.70
  • Monday's volume: 2,125,646
  • 3-month average volume: 1,679,520

UTi was a rounded bottom breakout back on June 4, but failed to continue trading above the 50-day simple moving average. However, the bullish trend didn't fail. Shares just needed to consolidate a bit.

Yesterday, price action closed over the 50-day simple moving average again -- and piqued my interest.

UTi traded up 5% yesterday, so it will likely pull back a bit today. That will give us a better entry. I'd look for an entry within yesterday's trading range, between $9.57 and $10.22. There is 32% potential to the upside from yesterday's close to the 200.

I'd set my stop as low as $9.36, which is 8% to the downside. But I like to let the chart do its thing and let it pull back. Sometimes I'll add to the position on pullbacks.

Target the resistance levels and let the trade work. Again, target the 200-day simple moving average for 32% to the upside.

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


Here's a counterpoint from TheStreet Ratings on UTi:

TheStreet Ratings team rates UTI WORLDWIDE INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:

"We rate UTI WORLDWIDE INC (UTIW) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income, weak operating cash flow and generally disappointing historical performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Air Freight & Logistics industry. The net income has significantly decreased by 247.7% when compared to the same quarter one year ago, falling from -$12.42 million to -$43.18 million.
  • Net operating cash flow has significantly decreased to -$122.14 million or 132.36% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 37.29%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 258.33% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Air Freight & Logistics industry and the overall market, UTI WORLDWIDE INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • UTIW, with its decline in revenue, slightly underperformed the industry average of 3.6%. Since the same quarter one year prior, revenues slightly dropped by 3.3%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.

Good luck traders!

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.

Here's What We Think We Know About the Next iPad

Clorox's Glad Grabs Market Share With Premium Trash Bag Gains

Vertex Pharma Cystic Fibrosis Combo Therapy Hits Key Endpoints in Two Pivotal Trials

Red Hat CEO Jim Whitehurst: No One Knows OpenStack Better Than Us

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.

More from Opinion

Elon Musk's Latest Twitter Tirade Is the Dumbest Thing on Wall Street

Elon Musk's Latest Twitter Tirade Is the Dumbest Thing on Wall Street

Elon Musk's Twitter Tirade Is the Dumbest Thing on Wall Street

Elon Musk's Twitter Tirade Is the Dumbest Thing on Wall Street

Why Google's Search Momentum Won't Be Badly Hurt by New EU Rules

Why Google's Search Momentum Won't Be Badly Hurt by New EU Rules

Flashback Friday: Amazon, Chip Stocks, Memorial Day

Flashback Friday: Amazon, Chip Stocks, Memorial Day

Time to Talk Tesla: What Happened This Week, Elon?

Time to Talk Tesla: What Happened This Week, Elon?