Let's start the week with a follow-up on Rovi (ROVI - Get Report), one of the stocks that we looked at last week. At the time, we were looking at an if/then trade forming in shares: If ROVI broke out above $32.50 resistance, then it made sense to buy.
Sure enough, shares broke out two days later, pushing approximately 8.5% higher and shares started to fill the gap from the beginning of November. Now the question is whether it still makes sense to hold this trade.
The short answer is yes. With the nearest overhead resistance level just shy of $40, there's still considerable room for upside in ROVI. Remember that the gap shares are filling now is essentially a void where shares haven't changed hands in the past. As a result, market participants aren't likely to try to unload their positions until they get closer to previous territory.I'd recommend shooting for that sub $40 price target in the mid-term. Rovi shows up on a list of 13 Tech Stocks to Buy in 2012.