Another stock that exploded higher Thursday and now is within range of triggering a major breakout trade is Mips Technologies (MIPS), a provider of industry-standard processor architectures and cores for digital home, networking and mobile applications. This stock is off to a strong start in 2012, with shares up over 47%.
Shares of MIPS Technology soared on Thursday by 26.3% after Bloomberg reported that the company has hired Goldman Sachs to pursue a potential sale.
If you take a look at the chart for MIPS Technologies, you'll notice that the huge up-move on Thursday pushed this stock back above both its 50-day and 200-day moving averages on monster volume. Volume registered over 7.8 million shares, which is well above its three-month average action of 820,274 shares. That move has now pushed MIPS within range of triggering a major near-term breakout trade.>>6 Tech Stocks That Rate Better Than Apple Market players should now look for long-biased traders in MIPS if it can manage to sustain a high-volume move or close above some near-term overhead resistance at $7 a share. Look for volume on that move that registers close to or above 820,274 shares. If we get that action soon, look for MIPS to make a run at its next significant overhead resistance levels at $8.27 to $11 a share. Keep in mind that $11 is where this stock gapped down big last year with heavy volume. The daily high of that gap down day was around $9 a share. Since MIPS closed strong on Thursday right near its daily highs, I think this stock has a great chance of seeing its momentum continue and potentially trigger that near-term breakout. That said, I would only look for long-biased trades if it can sustain a trend above $7 with strong upside volume flows. A failure to get above $7 will put this stock into jeopardy of giving back a good portion of Thursday gains. Follow @stockpickr
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