Another stock that's trading within range of a solid breakout trade is
(LNG - Get Report)
, an energy company primarily engaged in liquid-natural-gas-related businesses. This stock is off to a hot start in 2012, with shares up over 60%.
If you take a look at the chart for Cheniere Energy, you'll see that this stock has sold off hard from its April high of $18.92 to a recent low of $10.51 a share. During that smack down, shares of LNG have consistently made lower highs and lower lows, which is bearish technical price action. That said, shares of LNG have started to rebound right off its 200-day
of $12.05 a share, and the stock is now moving within range of triggering a near-term breakout trade.
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Market players should now look for long-biased traders in LNG if it can manage to trigger a near-term breakout above some overhead resistance at $14.73 to $15.70 a share with high volume. Look for a sustained move or close above those levels with volume that hits close to or above its three-month average action of 6.2 million shares. If we get that action soon, then LNG has a great chance of re-testing and possibly taking out its next significant overhead resistance levels at $17.83 to $18.92 a share.
One could simply buy LNG once it clears $14.73, and then add more once it clears its 50-day moving average of $14.90 a share. I would then add again above $15.70 a share. You could buy off weakness below the 50-day, but I would rather get long this off strength.
This is another stock with a decent short interest. The current short interest as a percentage of the float for LNG stands at 11%. If this stock can start rocking back above those overhead resistance levels I mentioned, then we could easily see a solid short-covering rally kickoff.