TravelCenters of America
Another under-$10 stock that looks ready to trigger a near-term breakout trade is
TravelCenters of America
(TA - Get Report), which operates and franchises travel centers mainly along the U.S. interstate highway system. This stock has been on fire in 2013, with shares up 58% so far.
This company has a catalyst trade on the horizon, since the firm will report its fourth-quarter earnings on Monday, March 18. This sets up the stock from some possible bullish price action ahead and potentially after the quarter is reported.
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If you take a look at the chart for TravelCenters of America, you'll notice that this stock has been uptrending strong over the last month, with shares moving higher from its low of $6.44 to its recent high of $7.60 a share. During that uptrend, shares of TA have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of TA within range of triggering a near-term breakout trade.
Market players should now look for long-biased trades in TA if it manages to break out above some near-term overhead resistance levels at $7.60 to $7.64 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average volume of 315,943 shares. If that breakout hits soon, then TA will set up to enter new 52-week-high territory above $7.98 a share. Some possible upside targets off that breakout are $8 to $9.95 a share.
Traders can look to play TA for some upside action ahead of the quarter if that breakout triggers soon, and you can also wait until after the quarter is reported to play TA if it clears the key overhead resistance levels I've highlighted above.
Traders can buy TA off any weakness to anticipate that breakout and simply use a stop that sits just below some key near-term support levels at $7.01 to $6.71 share. One can also buy off strength once TA takes out those breakout levels with volume and then simply use a stop that sits just below $7.25 a share.
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