How These 3 Stocks Could Post Short-Term Gains

Traders may want to key an eye on SINA Corp (NASDAQ:SINA), Mastercard Inc (NYSE:MA), and TASER International, Inc. (NASDAQ:TASR)

Jul 9, 2015 at 12:18 PM
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Technical analysis is one of the 3 keys an effective contrarian trader should understand. One major aspect of technical analysis is moving averages, and how stocks have reacted to certain trendlines in the past. Each week, Schaeffer's Senior Quantitative Analyst Rocky White routes an email highlighting a number of stocks that meet certain criteria, and have pulled back to moving averages that have proven their bullish significance over the past three years. With that in mind, let's take a look at three names -- SINA Corp (NASDAQ:SINA), Mastercard Inc (NYSE:MA), and TASER International, Inc. (NASDAQ:TASR) -- that could be in store for short-term upside.


Due to the recent events in China, it's been a wild ride for SINA shareholders. However, the stock is still up 30% in 2015 -- including an 11.9% pop today to trade at $48.47, following a rare rally in mainland markets. Meanwhile, the shares recently touched their 160-day moving average. In the two other times this signal has occurred, SINA, on average, has posted a 9.5% 21-day gain, and is positive 50% of the time.

What makes SINA even more appealing is its 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 1.17. This reading is only 15 percentage points from an annual bearish high. Also, half of covering analysts rate SINA a "hold." If the security can continue its run up the charts, this pessimism could unwind and propel the shares higher.

Mastercard Inc (NYSE:MA)

Over the past 12 months, MA as added 24% to trade at $93.55. The shares also hit an all-time high of $96.31 on June 18 -- and today are up 1.2%, despite reports the European Union (EU) is filing an antitrust lawsuit against the credit card concern. Recently, the equity met up with its 80-day moving average, which has been a strong bullish indicator in the past. Nine of the 10 times MA has touched this trendline, it has posted a positive 21-day return, with an average gain of 3.5%.

However, short-term speculators have rarely been as put-skewed toward MA. The security's Schaeffer's put/call open interest ratio (SOIR) comes in at 1.31 -- just 1 percentage point from an annual high. A reversal of option trader behavior could certainly help push the stock higher in the near future.

TASER International, Inc. (NASDAQ:TASR)

As impressive as SINA and MA have been, TASR has outdone them both. The stock has outperformed the S&P 500 Index (SPX) by close to 20 percentage points in the past three months, and is 3.8% higher today at $32.58. TASR just hit its 80-day moving average as well, which is a very good sign for bulls. In the previous nine signals, the shares have moved higher 89% of the time, and have averaged a 21-day lead of 13%.

The equity still remains surrounded by pessimism, though. In fact, short interest increased 8% during the most recent two-week reporting period, and now accounts for almost one-fourth of TASR's total float. It would take bears over a week to buy back all their shares, at the stock's normal daily trading pace. There's plenty of sideline cash to drive this outperforming stock higher. 


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