Another stock that looks ready to trigger a near-term breakout trade is Synergy Pharmaceuticals ( SGYP), which is focused on the development of drugs to treat gastrointestinal disorders and diseases. This stock is off to a slow start so far in 2013, with shares off by 10%.
If you take a look at the chart for Synergy Pharmaceuticals, you'll notice that this stock has been trending sideways inside of a consolidation chart pattern for the last two months and change, with shares moving between $4.30 on the downside and $5.47 a share on the upside. Shares of SGYP are starting to trend higher here and move within range of both its 50-day and 200-day moving averages. That move is pushing SGYP close to triggering a near-term breakout trade above the upper-end of its sideways chart pattern.Market players should now look for long-biased trades in SGYP if it manages to break out above its 50-day at $4.96 and its 200-day at $5.17 a share and then once it takes out more near-term resistance levels at $5.30 to $5.47 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 action of 1.11 million shares. If that breakout triggers soon, then SGYP will set up to re-test or possibly take out its next major overhead resistance levels at $6.50 to its 52-week high at $7.44 a share. Traders can look to buy SGYP off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $4.55 or $4.30 a share. One could also buy SGYP 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.
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