Daily Stock Market Equity and Options Trading Commentary

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Thursday, February 25, 2010

Wednesday's Hot Stocks on Heavier Volume

With the U.S. markets paring much of Tuesday's losses Wednesday, there were 15 stocks which hit my screener that 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 15 stocks, all of which traded higher on heavier volume Wednesday February 24, 2010. Many times I find an option strategy I plan on opening if I am convinced some money can be made, however tonight is one of those rare instances where I will not be outlining any trades. However it is still important to track these stocks because if they appear again in the following sessions this may signal some real bullish activity. It is also important to note that this method is just one of the ways I use to find stocks for potential option trades.

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
Dollar Tree (DLTR) 12.26% 507.63%
ViroPharma Incorporated (VPHM) 10.24% 196.17%
TIM Participacoes (TSU) 5.51% 191.25%
Altera Corporation (ALTR) 3.92% 122.95%
Acme Packet (APKT) 6.05% 107.79%
Dollar Thrifty Automotive Group (DTG) 2.01% 95.11%
Capella Education Company (CPLA) 3.28% 90.92%
Nordson Corporation (NDSN) 3.74% 85.91%
Green Mountain Coffee Roasters (GMCR) 4.12% 77.51%
Cracker Barrel Old Country Store (CBRL) 2.88% 54.80%
Ashland (ASH) 4.33% 50.66%
Rackspace Hosting (RAX) 3.46% 27.03%
Aegean Marine Petroleum Network (ANW) 3.12% 25.97%
The Estee Lauder Companies (EL) 2.30% 24.57%
Cree, Inc. (CREE) 1.62% 21.83%

Out of the fifteen stocks above, one I will be keeping a very close eye on is Rackspace Hosting (RAX). I have traded Rackspace multiple times over the past 9 months and it looks as if it could move higher. I would consider a long position in RAX if it closes two days above 20.50. It may also be beneficial to note that Nordson Corporation (NDSN) also appeared on Tuesday's list of Hot Stocks.

Important Updates to Previous Posts:
First I believe it is important to make a quick update to Tuesday's blog post and my option strategy outlined on Rovi Corporation (ROVI). As stated I was looking for two consecutive closes above 34.50 in order to get long my bullish option strategy, however Rovi not only failed to show strength as the entire market rallied, but actually developed an ugly chart pattern, a bearish harami candle pattern. In order to still consider the strategy outlined yesterday, I will need to see this bearish pattern voided within the next few sessions. If the pattern is not voided I believe the play now becomes a bearish option strategy or a short candidate. If this pattern is not voided, I would consider a short position with a stop loss near 34.50. Sphere: Related Content


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