One name that's quickly moving within range of triggering a major breakout trade is
EZChip Semiconductor (
EZCH), a fabless semiconductor company engaged in the development and marketing of Ethernet network processors for networking equipment. This stock has been under pressure from the sellers in 2013, with shares off by 14%.
If you look at the chart for EZChip Semiconductor, you'll notice that this stock has just started to bounce right off its 50-day moving average at $26.90 a share. That bounce is quickly pushing shares of EZCH within range of triggering a major breakout trade.
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Market players should now look for long-biased trades in EZCH if it manages to break out above its 200-day moving average of $29.39 a share and then above more near-term resistance at $29.53 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 206,308 shares. If that breakout triggers soon, then EZCH will set up to re-test or possibly take out its next major overhead resistance levels at $35 to $35.65 a share, or even $38 a share.
Traders can look to buy EZCH off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $26.90 a share, or below more key support at $26.36 a share. One can also buy EZCH 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.