Last up is Standard Pacific (SPF - Get Report), a small-cap homebuilder that's been on a tear this year. Shares are up more than 82% in 2012, and they could be headed for triple-digits thanks to a bullish breakout in shares yesterday.
SPF had been forming a complex inverse head and shoulders pattern since the middle of May. The pattern normally indicates exhaustion among sellers, but when it's near the top of a stock's price action (as with SPF), it's a bigger signal that sellers are being completely overpowered. The breakout level for this stock was $5.50, which got taken out in yesterday's market session. That sends a buy signal out for this stock on Thursday, even if shares give back a bit in today's trading.
Lest you think that this pattern is less useful since it's so well known, think again: an academic study conducted by the
Federal Reserve Board of New York found that the results of 10,000 computer-simulated head-and-shoulders trades resulted in "profits
Twitter and become a fan on Facebook.