$THOR (Thoratec Laboratories Corp) Momentum trade

ThorHi everyone – happy Friday!

I hope this helps new traders! If you want to know more about how I learned to trade and where my trading rules come from, check out this guy.

I just wanted to do a quick update on a few trades that I did this week – $CRMD +10% profit and $SYN +10.5% profit. I closed out these trades only held them for a night or two.

I really wanted to discuss this new trade that I currently have a position in. $THOR (Thoratec Laboratories Corp) is a really nice bullish chart play. I entered this stock 2 days ago at around $39 per share. My strategy is based primarily on the chart – you can see from the daily chart above that the stock gapped up on 3 times daily volume, 3 days ago. It has had a beautiful rising channel since Sept-Oct, and more recently, it formed a beautiful 3-week pennant, or mini-coil, and then broke out with a breakaway gap on big volume. It looks like it’s headed up toward 43-44. It has a price target of $45 per share from several analysts. So this is not a long term trade, rather it is a chart swing play and I will sell in the low $40’s (I tend to sell waaaay to early!) if it works and set a trailing stop loss of the 4 ema. I do like the strong RSI on the daily and weekly charts.

Please do you own due diligence before trading on other peoples thoughts!

This stock has so far been a great example of a ‘buyable gap up’ they reported stellar earnings which caused that large increase in price on February 10th.

– Revenue of $128.0 million for the fourth quarter of 2014
– GAAP net income per diluted share of $0.21, and non-GAAP net income per diluted share of $0.39
– Company establishes 2015 guidance for revenue of $450 million to $460 million and net income per diluted share of $0.60 to $0.70 on a GAAP basis and $1.10 to $1.20 on a non-GAAP basis

“We were pleased with our results in the fourth quarter, which included sequential improvement in overall market growth and our competitive position,” said D. Keith Grossman, President and Chief Executive Officer.  “I am encouraged by initial progress with our recent organizational and execution related initiatives, and by the sales performance across all of our key geographies,” he added.

I find that good earnings combined with an awesome looking momentum chart often lead to a fairly easy profitable swing trade, atleast for a couple of days after the earnings report. I am still learning about how to tell how to gauge the length of the trend though, so often I sell too quickly.

Additionally, I look for anything else that might support my thesis or give the stock an extra boost – basically I want as much evidence/support for my bullish thesis as possible! In the case of $THOR I bought based on all of the above and the street upgrade the same day confirmed my confidence in this stock, please see – Thoratec upgraded by TheStreet to buy.

I hope this helps new traders! If you want to know more about how I learned to trade and where my trading rules come from, check out this guy.

Good luck!

Russell

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