Gentiva Health Services
Another stock that's setting up to trigger a near-term breakout trade is Gentiva Health Services (GTIV), which is engaged in providing home health services and hospice services. This stock hasn't done much so far in 2012, with shares up just 5% so far.
If you look at the chart for Gentiva Health Services, you'll see that this stock formed a major top back in April and May at around $9 a share, and then subsequently went on to crash lower to its recent low of $5.13 a share. During that monster move lower, shares of Gentiva Health Services were making lower highs and lower lows, which is bearish technical price action. That said, after tagging that $5.13 low, this stock started to reverse course and uptrend back above both its 50-day and 200-day moving averages. That move has now pushed GTIV within range of triggering a near-term breakout trade.
Traders should now look for long-biased traders in GTIV if this stock can manage to take out some near-term overhead resistance levels at $7.24 to $7.33 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 277,416 shares. If we get that action soon, then GTIV will have a great chance of re-testing and possibly taking out that former top at around $9 a share.One could be a buyer of GTIV off any weakness, and simply use a stop that sites just below its 50-day moving average of $6.79 a share. You could also just buy off strength once GTIV takes out $7.24 to $7.33 with high volume, and then use a stop just under $6.94 a share.