A stock in the computer hardware complex that's just starting to trigger a breakout trade today is Fusion-IO (FIO), a provider of data-centric computing solutions. This stock is off to a blazing hot start in 2012, with shares up over 30%.
If you look at the chart for Fusion-IO, you'll see that this stock recently formed a double bottom at around $21.26 to $21.84 a share. After bottoming near those levels, the stock then took off and traded back above its 50-day moving average of $26.21 with monster volume. Now the stock has started to push back above some key breakout and overhead resistance levels, following a huge upside volume day from Thursday.
Traders should now watch FIO for a sustained high-volume move and close above $29.75 to $30.49 a share. Look for volume that's near or well above its three-month average action of 2,909,590 shares. Also watch for the stock to close near its daily highs today, to signal that buyers are in control. At last check, volume today has already exceeded that amount at over 3.6 million shares. If we get a strong close for FIO, then this stock can continue to uptrend back towards its next significant overhead resistance level at $37 a share.Traders should now look for long-biased trades in FIO from here going forward as long as this stock is trending above those key breakout levels I mentioned. I would simply use a mental stop that's a few percentage points below $30.49 or below $29.75 a share, in case this breakout fails to hold. If it does hold, look for FIO to tag $37 a share or possibly much higher in the near future. Fusion-IO, one of 4 Companies Riding Facebook's Wave, was one of the 10 Best-Performing IPOs of 2011 and was also highlighted last month in " 5 Big Stocks to Trade for Gains." Follow @stockpickr
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