One name under-$10 name in the food processing complex that could be setting up for a big spike higher is Coffee Holding (JVA), an integrated wholesale coffee roaster and dealer in the U.S. This stock has been hammered during the last six months, with shares off by over 65%.
If you take a look at the chart for Coffee Holding, you'll notice that this stock is very close to triggering a big breakout trade if it can manage to take out some key technical levels soon. Those key technical levels are its 50-day moving average of $8.97 and some near-term overhead resistance at $9.15 a share. This stock has failed to trade above its 50-day moving average for more than a day or two for the past six months, so a move above it now should be considered very bullish.
Market players should now watch JVA for a sustained high-volume move and close above $8.97 and $9.15 a share to trigger a major breakout trade. Look for volume that registers near or above its three-month average action of 714,848 shares. If we get that action soon, then look for JVA to re-test $10.65 to $11.70 (its 200-day) in the near future.You could be a buyer of JVA off strength and get long once it manages to close above its 50-day moving average of $8.97 with volume. I would simply use a mental stop that's a few percentage points below that level in case the move fails. I would then add aggressively to any long positions once the stock takes out $9.15 with high-volume. This is another name with an extremely high short interest, since 26.9% of the tradable float is currently sold short by the bears. Due to this high short interest, a high-volume move over the 50-day could easily spark a massive short-squeeze that spikes JVA significantly higher.
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