Five Stock Trades for June, 2014
Wednesday, June 18, 2014

by Ian Harvey

June 17, 2014

Introduction

For short-term trading, stocks that are making big moves – massive volatility – are always a favorite.

When a stock makes a large-percentage move, it is often just the start of a new major trend -- a trend that can lead to huge profits.

Stocks that are making big-percentage moves either up or down are usually in play because their sector is becoming attractive or they have a major fundamental catalyst such as a recent earnings release. Sometimes stocks making big moves have been hit with an analyst upgrade or an analyst downgrade.

Here are five stocks that may fit this profile…..

DURECT Corporation (NASDAQ:DRRX)

DURECT Corporation (DRRX), a specialty pharmaceutical company, which is engaged in the development of pharmaceutical products based on its proprietary drug delivery technology platforms in the U.S. and internationally. 52-Week Range: $0.79-$2.69

Three-Month Average Volume: 397,035

From a technical perspective, DRRX has traded sharply higher above its 50-day moving average of $1.36 and back above its 200-day moving average of $1.51 with above-average volume. This sharp spike higher is quickly pushing shares of DRRX within range of triggering a major breakout trade. That trade will hit if DRRX manages to take out some key overhead resistance levels at $1.53 to $1.59 and then once it clears more key overhead resistance levels at $1.61 to $1.66 with high volume.

If that breakout starts soon, then DRRX will set up to re-fill some of its previous gap-down-day zone from February that started just above $2.10.

STOCK TRADE: Buy DRRX at market price (approx. $1.47), good for the day. Place a protective stop-loss at $1.00 and a pre-determined sell at $2.50.

XOMA Corp (NASDAQ:XOMA)

Xoma (XOMA) discovers and develops antibody-based therapeutics in the U.S., Europe, and the Asia Pacific. This stock closed up 1.2% to $4.75 a share in Thursday's trading session.

52-Week Range: $3.31-$9.57

Three-Month Average Volume: 1.99 million

From a technical perspective, XOMA has spiked notably higher here right above some near-term support at $4.55. This stock has been up trending strong for the last month or so, with shares moving higher from its low of $3.42 to its recent high of $5.03. During that uptrend, shares of XOMA have been consistently making higher lows and higher highs, which is bullish technical price action. This spike higher on Thursday is now starting to push shares of XOMA within range of triggering a near-term breakout trade. That trade will hit if XOMA manages to take out Thursday's intraday high of $4.92 to some more resistance at $5.03 with high volume.

Traders should now look for long-biased trades in XOMA as long as it's trending above support at $4.55 or above its 50-day at $4.23 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.99 million shares. If that breakout begins soon, then XOMA will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $5.46 to $5.45, or even $6 to $6.45.

STOCK TRADE: Buy XOMA at market price (approx. $4.87), good for the day. Place a protective stop-loss at $3.50 and a pre-determined sell at $6.50.

Nordic American Tanker Ltd (NYSE:NAT)

Nordic American Tankers Limited (NAT), which is engaged in acquiring and chartering double-hull tankers, is on the verge of overcoming difficult market conditions and growing at a robust pace. For the first quarter of 2014, Nordic American reported a positive net income for the first time in four years. There is a definite positive development in the company and industry, which makes the stock a good buy at current levels.

52-Week Range: $7.00-$12.61

Three-Month Average Volume: 1.38 million

Summary

• Nordic American has returned to profits after four years and looks good to sustain the positive momentum on strong industry fundamentals.

• The EV/EBITDA estimates for 2014 point to significant undervaluation and the stock is likely to fill the valuation gap over the next one year.

• A healthy dividend yield of 10.7% is likely to sustain on firm day rates and vessel addition in 2014, triggering cash inflow upside.

• Follow-on public offering gives the company financial flexibility and the public offering of Nordic American Offshore provides value unlocking opportunity.

Company And Asset Overview

Nordic American was incorporated in Bermuda in 1995 and is engaged in acquiring and chartering double-hull tankers with the company having 20 Suezmax tankers as of March 2014. In June 2014, the company announced the acquisition of two more tankers with the vessels expected to be delivered by August 2014. As of reporting date, the company's operating vessels were employed in the spot markets.

From an asset quality perspective, it is important to mention in the overview that since the beginning of 2012, 15 of the company's vessels have undergone technical quality checks. With relatively weak markets in 2012 and 2013, the idle time was utilized to ramp up quality. Going forward, drydocking costs and off-hire will be significantly reduced with a corresponding increase in the number of revenue days. The company expects no dry-docking for 2014.

From a technical perspective traders should now look for long-biased trades in NAT as long as it's trending above its 200-day at $8.70 or above more near-term support at $8.25 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.38 million shares. If that breakout triggers soon, then NAT will set up to re-fill some of its previous gap-down-day zone from April that started at $9.50. Any high-volume move above $9.50 will then give NAT a chance to tag $10 to $10.20, or even much more.

STOCK TRADE: Buy NAT at market price (approx. $9.02), good for the day. Place a protective stop-loss at $7.50 and a pre-determined sell at $14.50.

Body Central Corp (NASDAQ:BODY)

Body Central (BODY) operates as a specialty retailer of young women's apparel and accessories in the South, Southwest, Mid-Atlantic and Midwest regions of the U.S. This stock closed up 1.9% to $1.05 in Thursday's trading session.

52-Week Range: $0.58-$13.39

Three-Month Average Volume: 917,075

From a technical perspective, BODY trended modestly higher above its 50-day moving average of 92 cents per share. This stock has been up trending strong for the last few weeks, with shares moving higher from its low of 62 cents to its intraday high of $1.09. During that move, shares of BODY have been making mostly higher lows and higher highs, which is bullish technical price action. Shares of BODY are now starting to move within range of triggering a big breakout trade. That trade will hit if BODY manages to take out the high of $1.09 with strong upside volume.

Traders should now look for long-biased trades in BODY as long as it's trending above its 50-day at 92 cents per share and then once it sustains a move or close above $1.09 with volume that hits near or above 917,075 shares. If that breakout triggers soon, then BODY will set up to re-test or possibly take out its next major overhead resistance level at $1.34. Any high-volume move above $1.34 will then give BODY a chance to re-fill some of its previous gap-down-day zone from March that started just above $1.80.

STOCK TRADE: Buy BODY at market price (approx. $0.90), good for the day. Place a protective stop-loss at $0.60 and a pre-determined sell at $3.50.

Vertex Energy Inc (NASDAQ:VTNR)

Vertex Energy (VTNR) is an environmental-services firm that focuses on recycling and processing the runoff and excess of hydrocarbon streams from pipelines and refineries. It supplies the result, sometimes called “black oil,” to chemical companies for processing and blending. One division of the firm helps refiners dismantle and decommission older facilities. This “transmix” business provides feedstock back to the refining industry cheaply. VTNR has almost tripled in the past few months, but still is fairly cheap and has room to advance.

VTNR is a good buy at current levels, and expect it to advance in short order.

STOCK TRADE: Buy VTNR at market price (approx. $9.77), good for the day. Place a protective stop-loss at $7.50 and a pre-determined sell at $16.50.



”Success is simple. Do what's right, the right way, at the right time.”


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