1. First, let's look at American Realty Capital Properties, a commercial real estate company.
American Realty traded up 1.13% on Thursday to $12.58.
- Thursday's range: 12.40 - 12.60
- 52-week range: 11.76 - 15.33
- Thursday's volume: 8,399,790
- Three-month average volume:
American Realty looks good for a swing trade as it is a rounded-bottom breakout. The stock closed above the 50-day simple moving average on Thursday, and so let's watch for some follow through today, which means continued trading over the 50-day simple moving average and over the 34-day exponential moving average.
The chart is struggling to move above $12.58, which has been a resistance level since the gap down on May 21.
Yesterday's candlestick engulfed the candlesticks of the last four trading days, which implies that on Friday price action will continue higher.
The real breakout will happen at a close above yesterday's close. An inside day, however, would offer a cheaper entry.
Look for an entry above the 34-day exponential moving average, which is at $12.50. I'd set a stop at a close below yesterday's low of $12.40.
Typically with a rounded-bottom breakout, the target would be the 200-day simple moving average, but there is only about 4% more to go to the 200-day SMA.
With that in mind, I would target a higher resistance level, say $14.01, or $14.50, which would be 10% and 15% higher respectively. Stay long until you see a confirmed sell signal or a close below the t-line.
2. Now, let's look at Bitauto Holdings, which provides Internet content and marketing services for the automotive industry, primarily in China.
Bitauto traded up 1.33% on Thursday, closing at $48.06.
- Thursday's range: 43.17 - 48.17
- 52-week range: 11.00 - 49.67
- Thursday's volume: 685,493
- Three-month average volume: 948,045
Bitauto is a great chart, and has been trading in a bullish pattern since July 2012, up over 1,200% during that time. There have been pullbacks, but nothing major, as the stock has occasionally pulled back below the 50-day simple moving average.
Yesterday, Bitauto had a little pullback, offering traders a lower entry point.
Price action gapped down yesterday, opening below the 34-day exponential moving average, and then traded back up, engulfing the previous day's candlestick, a bullish engulfing signal, and engulfed the 34 EMA, 20 SMA, and the t-line. These rare signs that price action will continue trading higher today.
Look for an entry within yesterday's candlestick, anywhere above the 34-day exponential moving average, which is at $44.29.
I'd set my stop below the 50-day simple moving average at $41.97, and move it up in the following days as price action moves up.
I would remain bullish in this chart until there's a confirmed sell signal, and it would have to be a very compelling signal to go bearish, because this chart has done so well for so long.
I would target the top of the trend channel, which is around $55.25 today, roughly 15% higher.
Then I would secure some profits at that level, wait for another pullback and add to the position, and repeat until my pockets were full of cash. Stay long until you see a confirmed sell signal, and wait to see several days of confirmation to get out of this chart.
3. Lastly, let's look at Westport Innovations, a company that develops low-emission technologies for cars.
Westport had a bullish day yesterday, trading up 3.26% to $17.74.
- Thursday's range: 16.63 - 17.74
- 52-week range: 12.42 - 33.88
- Thursday's volume: 913,540
- Three-month average volume: 922,394
The stock was a rounded-bottom breakout on May 2, but technically failed when it traded back below the 50-day exponential moving average.
Although it failed the breakout, it did not fail its bullish trend. It just had some profit-taking and indecision for a month and a half, and yet it has remained bullish overall.
There were trading opportunities in the sideways price movement, and a big bullish day on June 16 brought the price action back over the moving averages.
This action cleared some resistance levels, which have now become support and which were tested in the following days.
During the last week, there was a pullback opportunity as prices fell below the 20-day simple moving average, and the stock just tapped the 34-day exponential moving average during intraday trading.
Yesterday, the chart formed a bullish engulfing signal, and the candlestick engulfed the candles of the previous two days. That is clear bullish sentiment, and price action will likely continue to rise.
Look for an entry above the 20-day simple moving average, which is at $17.03, or even as low as yesterday's open. The lower you can enter, the better the gain potential.
I'd set a stop at about $16, which is just above the 50-day simple moving average, and target some of the resistance levels, first $19.90, which is 12% higher from yesterday's close, and then I$22.09, which would be about 24% to the upside.
Stay long until you see a confirmed sell signal, or a close below the t-line, with confirmation.
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At the time of publication, the author had no position in any of the stocks mentioned.
This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.