Another stock that's setting up to trigger a near-term breakout trade is Geron (GERN - Get Report), a biopharmaceutical company developing therapies for cancer. This stock is off to a decent start so far in 2012, with shares up over 17%.
If you look at the chart for GERN, you'll see that this stock has been trading within range for the past month, with shares moving between $1.50 and $1.79 a share. That move has also started to coil up the stock between its 50-day moving average at $1.52 and its 200-day moving average of $1.73 a share. Traders should now look to play a move in GERN above its 200-day at $1.73 and above the upper end of that range. A high-volume move above those levels could spark a huge move higher in this stock.
Traders should now look for long-biased traders in GERN if this stock can manage to clear its 200-day at $1.73 a share, and then take out some more overhead resistance at $1.79 to $1.89 a share with high volume. Look for a sustained move or close above those levels with volume that's near or above 688,470 shares. If we get that action soon, then GERN could easily re-test and possibly take out its next major overhead resistance levels at $2.22 to $2.60 a share.One could be a buyer of GERN off any weakness, and simply use a stop around $1.60 or even just below $1.50 a share. You could also just buy off strength once GERN once GERN starts to challenge those breakout levels, and then simply use a stop that sits a few percentage points below its 200-day moving average.