Another stock that's moving within range of triggering a major breakout trade is Coffee Holding (JVA - Get Report), 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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