Big Swing Trade Ideas for July 28: Apple, Goldcorp, Tower Group

NEW YORK (TheStreet) -- Today's top swing picks are Apple (AAPL), Goldcorp (GG) and Tower Group (TWGP).

1. First, let look Apple, the mega-computer company.

Apple traded up 0.66% on Friday, closing at $97.67.

  • Friday's range: $96.64 - $97.84
  • 52-week range: $62.89 - $97.88
  • Friday's volume: 43,533,519
  • Three-month average volume: 61,167,300

Apple is a great stock to swing trade. It has great volume and moves a lot.

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Last week, Apple reported positive earnings, and as a result, the stock continues to rise. The day after the earnings report, the chart formed a doji gap up, which is known as a trader's best friend.

The sentiment is clear that when a doji gap up appears -- a doji shows a struggle between the bulls and bears -- the gap up shows the winner, and in this case, the bulls won.

Following the doji gap up, Friday's candlestick was a bullish engulfing signal, which also implies that the stock will continue to rise today.

The stock will likely reach the $100 level in the near future. Look for an entry anywhere above the t-line, which is at $95.99.

I'd set my stop at Friday's low of $96.64, maybe a few pennies below that. Target the $100 level to start, and then add to the position on the dips. The next targets are $104, $108 and $110.

Trading Apple is as safe as the computer the company has created. Stay long until you see a confirmed sell signal or a close below the t-line.

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2. Now, let's look at miner Goldcorp.

Goldcorp traded up 3.52% on Friday, closing at $28.20.

  • Friday's range: $27.15 - $28.24
  • 52-week range: $20.54 - $32.15
  • Friday's volume: 4,951,942
  • Three-month average volume: 4,523,520

The mining sector has been working well. Take a look at SPDR S&P Metals and Mining (XME), an exchange-traded fund. The chart implies continued bullish sentiment, which adds to the appeal of Goldcorp's chart.

On Friday, Goldcorp formed a large bullish engulfing signal. The candlestick engulfed the previous seven trading days and closed above the 20-day simple moving average and the t-line.

The price is up 23% in the last 52 days, and has been consolidating for the last month, and so now let's watch for another breakout. The breakout level is at about $28.88.

The current trading level is a strong resistance level, and so I'd keep my stop tight. I'd like an entry above the 20-day simple moving average, at $27.75, and I'd set my stop just below that, at about $27.70, which is the t-line.

I would target the most recent highs, starting with around the $30 level, and then $31.90-ish, which is 6% and 13% higher respectively.

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

3. Lastly, let look at Tower Group International, an insurance and reinsurance company.

Tower Group had a big bullish day on Friday and traded up 8.21%, closing at $2.11

  • Friday's range: $1.95 - $2.20
  • 52-week range: $1.62 - $22.30
  • Friday's volume: 1,640,504
  • Three-month average volume: 1,239,570

Tower Group looks good technically, as it is a rounded-bottom breakout and has 42% potential to the upside. The chart appeared on my scanner on Friday when it closed above the 50-day SMA.

We need to see some follow-through today, and continued trading above the 50-day SMA to remain interested in this chart.

The rounded-bottom breakout is an attempt at catching a bottom that has turned around. This stock hasn't been above the 50-day SMA with any conviction since August 2013.

With that, I would set my stop just below the 50-day SMA at $2, and move my stop up as the price action moves up. This is the way to secure profits and mitigate losses.

There is overhead resistance at $2.41, $2.70, $2.85 and again at the 200-day SMA. So, I would use these levels as my targets.

Ideally, I would stay long and shoot for the 200-day simple moving average, which is roughly 42% gain to the upside. Stay long until you see a confirmed sell signal or a close below the t-line.

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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.

TheStreet Ratings team rates APPLE INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate APPLE INC (AAPL) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and solid stock price performance. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."

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

  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.6%. Since the same quarter one year prior, revenues slightly increased by 6.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Although AAPL's debt-to-equity ratio of 0.26 is very low, it is currently higher than that of the industry average. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.18, which illustrates the ability to avoid short-term cash problems.
  • 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. When compared to other companies in the Computers & Peripherals industry and the overall market, APPLE INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • 44.56% is the gross profit margin for APPLE INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 20.69% is above that of the industry average.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 54.18% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, AAPL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.

Aaron Burt is based out of Sonoma County California, and is a contributor for hitandruncandlesticks.com. He focuses on short-to-intermediate term trades using candlestick analysis as his baseline for his trade ideas. He is a ghostwriter for candlestick analysts. He trades daily and analyzes charts daily. He trades charts, not news; news is subjective, but charts are factual.

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