Another stock that's moving within range of triggering a major breakout trade is Coffee Holding (JVA), an integrated wholesale coffee roaster and dealer in the U.S. This stock hasn't done much so far in 2013, with shares up by just 4%.
If you look at the chart for Coffee Holding, you'll notice that this stock has been trading inside of a consolidation pattern for the last month and change, with shares moving between $7.07 on the downside and $7.65 on the upside. A high-volume move above the upper end of that consolidation pattern could trigger a major breakout trade for shares of JVA.
Traders should now look for long-biased trades in JVA if it manages to break out above its 50-day moving average of $7.44 a share and then once it takes out more overhead resistance at $7.65 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 173,597 shares. If that breakout triggers soon, then JVA will set up to re-test or possibly take out its next major overhead resistance levels at $8.84 to $8.96 a share. Any high-volume move above $8.96 will then put $10 into range for shares of JVA.Traders can look to buy JVA off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $7.16 to $7.07 a share. One can also buy off strength once JVA takes out those breakout levels with volume and then simply use a stop right around $7.25 a share.
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