Top Swing Trade Ideas for Tuesday, August 19: Apple, Zynga, More

NEW YORK (TheStreet) -- Good day traders!

Today's top swing picks are Apple (APPL) , Amarin (AMRN) and Zynga (ZNGA) .

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1. First, let's look at the mega-awesome computer and phone manufacturer, Apple.

Apple traded up 1.20% on Monday, closing at $99.16

  • Monday's range: $97.98 - $99.37
  • 52-week range: $63.89 - $99.44
  • Monday's volume: 46,471,236
  • 3-month average volume: 53,710,300

Apple looks great at this level -- it is sitting right at a breakout level. Yesterday completed the two-candlestick signal, the doji gap-up. The doji gap-up is a great pattern to trade, as it has great upside potential. (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.) Shares are trading up after bouncing off the 50-day simple moving average on Aug. 8. The stock chart formed the perfect hammer candlestick signal, which told us that the bottom has been reached. Now I'd like to see a break above the 52-week high of $99.44.

My trade plan for Apple would be to enter a position as low as you can get in -- an inside day entry would be great, but unlikely. I like an entry between $97.53 and $99.16. I'd set a stop just below the t-line, at about $97.00. I will target the top of the previous trend channel, and look to add to my position on pullbacks like we are experiencing right now. Once the top of the trend channel is reached, I will take partial profits, and buy on the next dip.

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

2. Now, let's look at Amarin, a biopharmaceutical company focused on the development and commercialization of therapeutic products for the treatment for cardiovascular diseases in the U.S.

Amarin traded up 2.17% on Monday, closing at $1.86.

  • Monday's range: $1.79 - $1.88
  • 52-week range: $1.28 - $7.40
  • Monday's volume: 3,536,338
  • 3-month average volume: 1,948,880

Amarin looks like a good swing trade for its gain potential in a short period. Share price is up 46% from its 52-week low that was reached back in the end of May. Price action has been slowly and steadily trading up. Then it pulled back, and now it is trading over the major moving averages. Last Thursday, Amarin had a big day, trading up nearly 12%, then formed a couple of dojis, which is a nice continuation pattern and confirmation of the bullish trade. Yesterday formed a bullish engulfing signal, and will likely trade higher today.

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Amarin is a penny stock, so a lot of folks don't care for trading these types of stocks, but this has great return potential.

My trade plan would be to enter a position between $1.75 and yesterday's high. I'd set a stop at about $1.70, which is the 200-day simple moving average. I would target the overhead resistance levels. Stay long until you see a confirmed sell signal or a close below the t-line.

3. Lastly, let's look at Zynga, the online gaming platform.

  • Monday's range: $2.92 - $3.09
  • 52-week range: $2.70 - $5.89
  • Monday's volume: 35,914,815
  • 3-month average volume: 23,386,000

Zynga traded up 5.84% on Monday and closed at $3.08.

Zynga is in a rounded-bottom breakout pattern -- shares closed over the 50-day simple moving average.  Zynga has been in a big downtrend since March, down nearly 50% from its 52-week high that was reached in March. Zynga reported positive earnings on Aug. 7, and shares have traded up since. The stock is up 14% from the low prior to the earnings report. Yesterday, Zynga closed over the 50-day simple moving average on above-average volumes, piquing my interest.

Read More: Why Shorting Tesla Is Not a Smart Plan for Now

My trade plan would be to enter a position above the 50-day simple moving average, or as low as $3.02. I'd set a stop at about $3.00 too. I would target the 200-day simple moving average, which is at $3.90 -- 26.5% to the upside from yesterday's close.

There is overhead resistance at $3.25 and $3.40, so watch for a sell signal, consolidation, or a continuation pattern at these levels.

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

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.

At the time of publication, the author was long AAPL.

Follow @aarongallaher

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

 


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

"We rate ZYNGA INC (ZNGA) 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 deteriorating net income, disappointing return on equity 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 Software industry. The net income has significantly decreased by 295.6% when compared to the same quarter one year ago, falling from -$15.81 million to -$62.53 million.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Software industry and the overall market, ZYNGA INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • In its most recent trading session, ZNGA has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. 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.
  • The revenue fell significantly faster than the industry average of 11.6%. Since the same quarter one year prior, revenues fell by 33.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The gross profit margin for ZYNGA INC is currently very high, coming in at 79.53%. Regardless of ZNGA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ZNGA's net profit margin of -40.80% significantly underperformed when compared to the industry average.
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. Follow him on Twitter @aarongallaher.

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