Pedone Watching Care.com, China Finance Online

In this week’s email to subscribers, independent trader and technical analyst Roberto Pedone takes a look at a few interesting small and micro-cap stocks.

Below is a quick glance into two micro-cap services stocks that he likes.

Care.com

Care.com Inc (NYSE: CRCM) is an online marketplace for finding and managing family care. “That hammer candle looks like the bottom or...near close to it off that $5.66 print,” he explained.

The trader believes this is a good swing candidate or short-term trade if the stock can clear its 20-day at $6.32 and then close to $6.60 with volume.

The float is low and there are lots of shorts, with 16 percent of 12 million shares float sold short. “Remember, a hedge fund recently took a decent stake here,” Pedone concluded, possibly Tenzing Global Management, which disclosed a position with 2.2 million shares on May 22.

China Finance Online Co.

The other stock Pedone likes is China Finance Online Co. (ADR) (NASDAQ: JRJC).

The investor explains that he likes “hot charts of stocks with low floats and lots of shorts [because] (…) when they get volume they can explode and rack up big gains fast.”

So, as the Chinese stock market continues to surge, this play “makes a lot of sense from a theme perspective.”

“Combine that with the low float of 11.5 million shares and the high short interest at 15.9% and you have an explosive idea here,” Pedone concluded.