Stocks to Watch This Week and Potential Trades to Make

Below is a list of several stocks to watch this week. Each week I publish stocks to watch for the upcoming week as potential momentum trades or longer-term investments. The stocks below all have a 50k minimum average daily share volume and traded at a 52-week high on strong volume, with a minimum of two times relative volume on Friday, July 22nd. In addition, stocks were required to close Friday higher than the open price.

The full list with weekly performance is tracked on a spreadsheet on the right-hand side of Scott's Investments.  This week should be interesting as the debt ceiling debate continues.  I typically try to ignore the news and macro events.  However, it will be important to follow the debt ceiling debate this week as it will impact the markets and any of the stocks mentioned in this list. 

Also, check my feed on Stocktwits and Twitter for the most current developments as I monitor these stocks throughout the week.

In addition, I am adding some discretionary picks to the list that are in a positive uptrend but which do not meet the terms of the screen.  Those picks are at the bottom of the spreadsheet. 





LRAD Corporation (LRAD)

LRAD Corporation designs, develops, and commercializes sound reproduction technologies and products primarily in North America, Europe, and Asia.  Its directional sound systems are used in various applications, including government and military, commerce, law enforcement, commercial security, and wildlife preservation and control.

The company has a $97 million market cap and currently trades at a forward price/earnings of 12 and has no long term debt.  Its current margins make the company appealing if it can grow revenue at double digit rates. The company stated on July 11th that it expects record fiscal year profits and first consecutive fiscal year of double digit sales growth.

I expect that if it can close above $3 then we could see $4 in the intermediate term.  You will see the long term support/resistance levels on the monthly chart below (charts courtesy of Finviz):




Anatares Pharma (AIS)

AIS reached another new high this week on strong volume.  The company focuses on self-injection pharmaceutical products and technologies, and topical gel-based products.  The company has been given an outperform rating by Oppenheimer with a target of $3.20 and multiple directors purchased stock this spring in the mid $1 range.  The stock reached a new 52 week high but the most intriguing aspect is that it reached price highs on high volume and no news.

The company's Anturol drug for overactive bladder is awaiting approval by the FDA.  However, Watson Pharmaceuticals recently signed a licensing deal for the drug in the US and Canada if the FDA approves the drug.  A decisions is expected by December 8th, 2011. 

$2 had been a point of heavy resistance in previous months and years, and with the stock now clear of that level, little technical resistance remains:



Lithia Motors (LAD)

LAD has been featured multiple times on screens performed on Scott's Investments, most recently on July 16th. The company has again reached a 52 week high, while still trading at a forward price to earnings of less than 13 with a price to earnings growth ratio of 1.17 and price to sales of .25.  It has an earnings conference call scheduled for July 27th, so I expect volatility in the shares this week.

With profit margin of less than 1% and high debt to equity ratio of 1.70, the company does not have much margin for error in the long-term.  However, it has remained in a nice uptrend and its earnings growth could lead to further gains if this week's earnings report pleases investors (monthly chart):





Disclosures: Long AIS. Also long SCLN and PSMT which are listed on the spreadsheet, and may purchase any stocks mentioned after initial publication of this article