The Trader Daily

 | Jun 05, 2014 | 7:30 AM EDT  | Comments
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Stock quotes in this article:

sune

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spy

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gm

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sgen

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bmrn

In case you've been asleep in a cave all week, Thursday's headline event is the 7:45 a.m. EDT European Central Bank monetary policy decision. Then there's a press conference with ECB president Mario Draghi 45 minutes later, at 8:30 a.m. Based on everything I've heard and read, far more attention should be paid to what Draghi says during the 8:30 a.m. press conference than to that ECB release.

Once the ECB meeting and press conference are out of the way, U.S. markets will have very little to price in until Friday's premarket employment-situation report. So if global participants yawn at whatever the ECB and Draghi have to say, prepare yourself for yet another snoozer of a trading session.   

Most traders are familiar with First Solar (FSLR) and SolarCity (SCTY), but what about SunEdison (SUNE)? If you've been in the game for a while and don't recognize the name SunEdison, perhaps you'll recognize it by its old name of MEMC Electronic Materials, or previous ticker symbol "WFR."

In any event, I began following SunEdison closely in late April, when the stock surged higher on news David Einhorn had accumulated a position in the name. Since that time, the stock has managed to both consolidate its late-2013 gains and avoid the massacre that befell so many other stocks in the high-growth momentum sectors.

Now, after three months of horizontal consolidation, I believe the stock is ready to break higher. My trigger, as you can see on the chart below, would be a closing print above $21.48 -- the mid-March closing swing high.

SunEdison (SUNE) -- Daily
Source: eSignal

For added emphasis, I thought I'd include the monthly chart as well. As you can see, the stock is on the verge of breaking out to new five-year highs.

SunEdison (SUNE) -- Monthly
Source: eSignal

As far as Thursday's SPDR S&P 500 (SPY) trading is concerned, it's important to remember that the premarket ECB events will likely result in an opening that's significantly away from Wednesday's $193.21 close. With that in mind, all trading above $193 should keep day time frame, and multi-day time frame traders in a bullish frame of mind. As long as demand remains in place against $193, there will be no reason to pursue an aggressively bearish posture. 

Failure to hold the line at $193 would begin to shake things up. A sustained break beneath that level would be expected to find day time frame scalpers positioning themselves short, with primary objectives of $192.60 and $192.25. As far as the day time frame participant is concerned, I'd have no interest in pressing a long or stabbing at longs on dips in the event that prices are ultimately rejected above $193.

Participants operating on a higher time frame should avoid turning bearish until, at a bare minimum, the SPY is closing beneath $192.

SPY -- 15-Minute Volume Profile
Source: eSignal

Additional Notes:

1. General Motors (GM) turned out to be a big mover during Wednesday's session, and I took advantage of the strength by selling June 13 weekly $36.50 strike calls against roughly half my long common position (this was also noted in Wednesday's comments section).

As discussed in Tuesday's Trader Daily, my primary target was the upper end of composite balance (based on a daily chart), or roughly $37 to $38. I'm willing to hold the equity position if it pulls in, consolidates and builds a higher base from which to drive higher. If, however, the stock continues to rally, I will have an effective exit price of roughly $37 on half my position. 

2. I first discussed Seattle Genetics (SGEN) and BioMarin Pharmaceutical (BMRN) as potential long ideas on May 29. Since then, both stocks have begun to tick higher. But there's no denying BioMarin, the stock I liked least, has been the standout performer. 

As far as Seattle Genetics is concerned, the stock is finally back above its 20-day and 30-day exponential moving averages. The relative-strength index, moreover, has finally ticked back above 50. Whether one is a day time frame scalper or a swing trader, I still believe this stock can work its way toward the $40-to-$41 area. The cut-bait-and-ignore level on Seattle Genetics remains at $32.82 on a closing basis. 

Any trading- or volume-profile-related questions can be posted in the comments section below, emailed to me at parkcityyeti@gmail.com or posted to my twitter feed @ByrneRWS.

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