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Swing trading stocks and ETFs with a solid approach to technical analysis.

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Morpheus Trading Group
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Morpheus Trading Group - swing trading blog
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Advanced Technical Analysis of ETFs
  • Don't Miss The Breakouts In These Top 2 Relative Strength Stocks 0 comments
    Sep 25, 2013 11:13 AM | about stocks: AMBA, ONVO

    The stock market remains in pullback mode after a strong surge off the lows, but leading individual stocks continue to hold up and show clear relative strength.

    Yesterday, for example, 4 of the 11 stocks in our swing trade newsletter gained at least 1.5%, even though the NASDAQ Composite was flat.

    Yelp ($YELP), which is presently showing an unrealized price gain of 33% since our August 21 buy entry, jumped 2.4% yesterday. LinkedIn ($LNKD), another leading stock we are currently holding, climbed 2.6%.

    As long as the broad market avoids heavy distribution and leadership stocks continue holding above key support levels, we expect the current correction to be short lived.

    As such, our market timing system remains in "Buy" mode and we continue to establish new long positions in leading stocks and ETFs.

    A 3-D Printing Stock And Biotech Stock - What Could They Have In Common?

    Going into today, there are two new swing trade buy setups on our Wagner Daily watchlist: Ambarella ($AMBA) and Organova Holdings ($ONVO).

    Although $AMBA is a biotech stock and $ONVO is in the exciting industry of 3-D printing, the common factor both stocks share is a very high IBD Relative Strength (NYSE:RS) rating.

    $AMBA has an RS rating of 94, while the RS rating of $ONVO is 98 (99 is the absolute best).

    Since high RS is one of the top technical criteria in the individual stocks we look to trade, both stocks pass that test with flying colors.

    Ambarella ($AMBA)

    In addition to having high relative strength, $AMBA has a 5-year growth rate of a whopping 53%. Combined with high RS, the high EPS rate makes $AMBA an ideal buy candidate.

    Let's take a look at the daily chart of $AMBA below:

    (click to enlarge)

    After rallying more than 300% since its IPO just over a year ago, $AMBA entered into a correction throughout July and August that caused the biotech stock to slip below intermediate-term support of its 50-day moving average.

    However, notice that $AMBA reclaimed its 50-day moving average earlier this month, and did so on a big jump in volume. This is a very bullish sign that indicates $AMBA is setting up for another rally higher.

    Organova Holdings ($ONVO)

    In July of this year, $ONVO surged to the $8 level and volume correspondingly spiked higher as well.

    After peaking near $8 this past summer, $ONVO pulled back to the $5 area, which caused a "higher low" to form (above the August low near $4.50). Since then, the stock has been in consolidation mode.

    On September 19, $ONVO recaptured its 10-week moving average (similar to 50-day moving average) on heavier than average volume, then consolidated on lighter volume for two days.

    Now, we are looking for the price action to tighten up around the 10-week moving average, which could soon lead to a breakout above the range:

    (click to enlarge)

    Because of their relative strength, combined with their bullish consolidation patterns, both $AMBA and $ONVO have entered our radar screen for potential buy entry in the coming days.

    Regular subscribers of our swing trading newsletter should note the "Watchlist" section of today's report for our exact entry, stop, and target prices for each of these two new swing trade setups.

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    Original Article

    DISCLAIMER: There is a risk for substantial losses trading securities and commodities. This material is for information purposes only and should not be construed as an offer or solicitation of an offer to buy or sell any securities. Morpheus Trading, LLC (hereinafter "The Company") is not a licensed broker, broker-dealer, market maker, investment banker, investment advisor, analyst or underwriter. This discussion contains forward-looking statements that involve risks and uncertainties. A stock's actual results could differ materially from descriptions given. The companies discussed in this report have not approved any statements made by The Company. Please consult a broker or financial planner before purchasing or selling any securities discussed in The Wagner Daily (hereinafter "The Newsletter"). The Company has not been compensated by any of the companies listed herein, or by their affiliates, agents, officers or employees for the preparation and distribution of any materials in The Newsletter. The Company and/or its affiliates, officers, directors and employees may or may not buy, sell or have positions in the securities discussed in The Newsletter and may profit in the event the shares of the companies discussed in The Newsletter rise or fall in value. Past performance never guarantees future results.

    © 2002-2013 Morpheus Trading, LLC
    Reproduction without permission is strictly prohibited.

    Stocks: AMBA, ONVO
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