Another stock that's setting up to trigger a near-term breakout trade is Zagg (ZAGG - Get Report), which designs, manufactures and distributes protective coverings, audio accessories and power solutions for consumer electronic and hand-held devices under the brand names invisibleSHIELD, ZAGGaudio and ZAGGskins. This stock has been ripping to the upside so far in 2012, with shares up over 55%.
If you look at the chart for Zagg, you'll notice that this stock has been trending sideways for the last two months, between $9.85 on the downside and $11.70 on the upside. Shares of ZAGG have now just started to push above its 200-day moving average of $10.65 a share, and its taking out its 50-day moving average of $10.81 a share. If ZAGG can manage to hold a trend above those levels, then this stock could setup to spike significantly higher and clear some near-term overhead resistance levels.
Traders should now look for long-biased traders in ZAGG if this stock can manage to hold a trend above its 200-day at $10.65 and its 50-day at $10.81 with strong upside volume flows. I would consider any upside volume day that registers near or above its three-month average volume of 801,389 shares as bullish. If ZAGG can hold that trend, then this stock will have a chance of re-testing and possibly taking out its next major overhead resistance levels at $11.70 to $12.19 a share. This stock could even hit its May high of $13.29 a share in the near-term.This company has a catalyst on the horizon, since ZAGG will report earnings on August 2nd after the market close. This is a favorite target of the short-sellers, since the current short interest as a percentage of the float for ZAGG is a whopping 33.6%. This stock could start to experience a monster short-squeeze right into its earning date, if it can hold those key moving averages and start to get some strong upside volume flows. One could be a buyer of ZAGG off any weakness, and simply use a stop right below its 200-day moving average of $10.65 a share. If you get long off weakness, then look to add once ZAGG takes out $11.70 and $12.19 a share with volume. Look for a quick trade to take advantage of any possible short-squeeze right into this company's earnings report.