Natural Grocers by Vitamin Cottage
One stock that's quickly moving within range of triggering a major breakout trade is Natural Grocers by Vitamin Cottage (NGVC - Get Report), a specialty retailer of natural and organic groceries and dietary supplements. This stock has been trending strong so far in 2013, with shares up 15.7%.
After the market close on Thursday, this company reported an impressive net sales increase of 28.1% to $95.8 million and a comparable store sales increase of 12.9%. Gross profit during the first quarter also increased 28.9% over the same period last year to $27.8 million.
If you look at the chart for Natural Grocers by Vitamin Cottage, you'll notice that the stock is gapping sharply higher today right above its 50-day moving average of $19.76 a share with lighter-than-average volume. Volume so far today has hit 52,000 shares, which is half of its three-month average daily volume of 111,408 shares. This move is quickly pushing shares of NGVC within range of triggering a major breakout trade.Market players should now look for long-biased trades in NGVC once it manages to break out above some near-term overhead resistance at $22.46 a share with high volume. Look for a sustained move or close above $22.46 a share with volume that hits near or above its three-month average action of 111,408 shares. If that breakout triggers soon, then NGVC will set up to re-test or possibly take its 52-week high and its all-time high of $25 a share. Traders can look to buy NGVC off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $19.76 a share or right below today's low of $20.55 a share. One can also buy off strength once NGVC clears $22.46 a share with volume and then use a stop that sits right below $21.50 a share or $20.54 a share. This stock is a favorite target of the bears, since its current short interest as a percentage of its float stands at 14.7%. If that breakout triggers soon, then shares of NGVC could easily see a monster short-squeeze develop quickly. If shares of NGVC ever take out $25 with volume, then the bears will be in serious trouble because there will be no more overhead resistance for the stock to contend with.