Daily Stock Market Equity and Options Trading Commentary

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Friday, February 26, 2010

Thursday's Hot Stocks on Heavier Volume

With the major indices trading lower Thursday, there were 21 stocks which fought the trend and traded higher on heavier volume. If this is your first time reading one of my breakout reports you'll want to read the section below, however if you are familiar with my daily breakout report you should skip ahead to the list of stocks.

To reiterate previous blog posts like this, the first thing I do is scan the list for familiar names, such as stocks I am quite familiar with or ones which have appeared on similar scans multiple times in the past week or two (most of these names are unfamiliar so it saves a lot of time). This indicates there may be some real momentum behind the stock, and that it could trade higher in following sessions as well. Then (if and when any of the stocks I find are familiar to me), I make sure the stock has options available to trade, and then take a look at the chart(s) to see if I can structure a potential option trade. The list in this post includes 21 stocks, all of which traded higher on heavier volume Thursday February 25, 2010. Many times I find an option strategy I plan on opening if I am convinced some money can be made.

The table below shows the company, ticker, per share % increase, and volume increase (% increased compared to 50 day average). For your convenience I have ranked the stocks in order from greatest to least volume % change.

Company Ticker Price Change Volume Change
Coca-Cola Enterprises (CCE) 32.85% 1635.94%
Dr Pepper Snapple Group (DPS) 11.10% 781.15%
True Religion Apparel (TRLG) 18.38% 649.76%
Cinemark Holdings (CNK) 4.70% 334.09%
Mylan (MYL) 6.59% 325.24%
Safeway (SWY) 5.23% 303.13%
Limited Brands (LTD) 2.83% 298.08%
TRW Automotive Holdings (TRW) 7.22% 252.96%
Iron Mountain Inorated (IRM) 7.08% 239.72%
Liberty Media (LINTA) 8.20% 215.33%
Cablevision Systems (CVC) 3.29% 194.26%
Kohl's (KSS) 4.83% 180.93%
The TJX Companies (TJX) 3.04% 153.29%
Altera (ALTR) 1.20% 109.08%
Big Lots (BIG) 3.52% 81.55%
Whole Foods Market (WFMI) 1.62% 62.22%
Perrigo Company (PRGO) 1.93% 51.98%
Cree (CREE) 1.84% 43.49%
China Agritech (CAGC) 6.48% 41.75%
DineEquity (DIN) 2.60% 39.92%
ATP Oil & Gas (ATPG) 5.03% 25.38%

Out of the 21 stocks above, one stock I will be keeping a close eye on in the following sessions is China Agritech (CAGC). I have noticed China Agritech appear multiple times lately, including on Monday's List. I believe after Thursday's price action it could be poised for a move even higher, with a bullish candle pattern emerging. You will see a bullish engulfing pattern on the chart below, however I would like to see continued strength and a close above 24.03 (which takes out the open price on February 23) on heavier volume for a confirmation. Unfortunately I will not be detailing an option strategy today as options on CAGC were recently released for trading and they currently have zero open interest across the board, therefore they are still very illiquid. I may post the option strategy I will be looking to use on CAGC (if and when I decide to do so) in a future post so keep checking back if you want some ideas.

Click chart to enlarge
It is also important to note that one stock which appeared both Thursday and Wednesday is Cree, Inc. (CREE), so I will also be watching that stock in the following trading sessions as well.

These are just examples and are not recommendations to buy or sell any security.

The reason option volumes have surged in the last five years is because they are a great way to hedge your portfolio as well as create income off of your shares (see chart here). Keep in mind when using this strategy it is essential that broker commissions are low enough to profit from the position.

Disclosure: No Positions Sphere: Related Content


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