Another stock that's starting to move within range of triggering a near-term breakout trade is SunPower (SPWR), a vertically integrated solar products and services company that designs, manufactures and delivers high-performance solar electric systems worldwide for residential, commercial and utility-scale power plant customers. This stock has made an insane move higher so far in 2013, with shares up a whopping 247%.
If you look at the chart for SunPower, you'll notice that this stock recently pulled back of its 52-week high of $23.76 a share and found some buying interest at around $18 a share. This stock has actually put in a triple bottom at $18.05, $18 to $17.77 a share over the last few weeks. If that bottom holds, which it has so far, then SPWR could be ready to triggering a near-term breakout trade.Traders should now look for long-biased trades in SPWR if it manages to break out above some near-term overhead resistance levels at $19.67 to $20.90 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average volume of 5.79 million shares. If that breakout triggers soon, then SPWR will set up to re-test or possibly take out its 52-week high at $23.76 a share. Any high-volume move above that level will then put $25 to $30 into range for shares of SPWR. Traders can look to buy SPWR off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $18 to $17.77 a share. One can also buy SPWR off strength once it takes out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point. I would add to either position once SPWR takes out its 52-week high at $23.76 a share with high volume. This stock is loved among the short-sellers, since the current short interest as a percentage of the float for SPWR is extremely higher at 29.7%. That high of a short interest could easily produce an explosive move if SPWR triggers that breakout soon, so make sure to have this name on your breakout trading watchlist.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV