One name in the software and programming complex that looks ready to trigger a major breakout trade is Brightcove (BCOV). This cloud content-services company is a global provider of cloud-based solutions for publishing and distributing professional digital media. This stock is off to a decent start in 2012, with shares up more than 10%.
If you look at the chart for Brightcove, you'll see that this stock sold off hard from its March high of $25.43 to a recent low of $12.10 a share. During that sharp move lower, shares of Brightcove have mostly made lower highs and lower lows, which is bearish technical price action.
That said, since hitting that low of $12.10, shares of Brightcove have now started to make higher highs and higher lows, which is bullish technical price action. That change in trend has now pushed BCOV within range of trigging a near-term breakout trade.Market players should now look for long-biased trades if BCOV can manage to take out its 50-day moving average of $15.76, and then trade above some near-term overhead resistance at $16.39 a share with high-volume. Look for a sustained move or close above those levels with volume that's near or above its three-month average action of 184,802 shares. If we get that action soon, then BCOV could easily rip higher, back toward its next significant overhead resistance levels at $20.50 to $22 a share. One could look to buy BCOV off weakness and simply use a stop around some near-term support at $15.00 to $14.42 a share. You could also buy off strength and get long once BCOV maintains a trend above its 50-day, and then takes out $16.39 with high volume. I would simply use a stop just below the 50-day if you buy off strength to play this potential breakout.
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