What to trade on a short week? Tuesdays Surflist 05-31-2016

Market Analysis

Last week market made some strong move starting Tuesday, May 24 based on the home sale data and kept it's gain even after Fed chair hinting that the rate hike is inevitable this summer. SPY closed strongly on Friday and it will be interesting to see a $211 break this week. However, historically memorial day weekend is when market start to trend downward as we've see in 2015 but we all know that

past performance is not an indicator of future results

With that aside lets take a look at some trading ideas for next week.

NYSE:AFI [Armstrong Flooring, Inc.]


Beautiful chart from lower left to top right. This is a recent IPO which reported good earnings as detailed here. I'll be looking for any pullback for entry anticipating $18 break if this has legs.

NYSE:CAL [Caleres, Inc.]

CAL-05-31-2016 Management really pulled a rabbit out of the hat to woo wall street by reporting solid outlook for 2016 despite Q1 earning miss. Analyst jumped in by by upgrading this stock with a Buy rating and a price target of $30. Chart isn't that impressive as it's all over the place but the bounce is worth noting with strong volume. I'll most likely look to build a swing position if the momentum continues next week.

NYSE:NEWR [New Relic, Inc.]


Although they operate in a niche space their suite of product is comprehensive. I've personally used their products and there is still tremendous room to grow in the enterprise space given the breath of their product line. They do compete with big names such as HP,CA and Microsoft and will continue to fight for market share. Long term this is a growth stock with $40+ price target despite the earning estimate not looking that attractive as they continue to invest heavily on R&D. If the stock doesn't perform well they are also a prime candidate for a buyout as the CEO has a history of strong exit from 10 years ago. I'll be looking to build a long position between $28.50 - $29.50.

NYSE:YRD [Yirendai Ltd.]

YRD-05-31-2016 Suffering with an exponential growth seen quarter over quarter after a dismal performance shortly past IPO, YRD is up more than 300% since mid February. This is poised to break $15 if the steady and strong volume continues. I've traded this multiple times in the past two weeks and will continue to look for good entry for a $15 break. If the breakout isn't strong enough we should expect a pull back to $12 area.

Here are few other stocks I'm watching next week for either long or short position but not going into details.


Happy Trading!

PS: questions? comments? feedback? I'd love to hear them plus I'm not trying to sell you anything either :)