Document solutions firm Xerox ( XRX) has been quietly working its way higher since the start of 2013; year-to-date, the stock is up 50%. But the trend is far from over. Here's how to trade new highs in Xerox.
Right now, Xerox is forming an ascending triangle pattern, a bullish price setup that's formed by horizontal resistance to the upside at $10.50 and uptrending support below shares. Basically, as XRX bonces in between those two technical levels, it's getting squeezed closer and closer to a breakout through that $10.50 level. When it happens, traders have a buy signal in shares.Momentum, measured by 14-day RSI, adds some extra confidence to more upside in Xerox. The momentum gauge has been in an uptrend itself since the pattern started forming. If you decide to be a buyer on the breakout above $10.50, I'd recommend keeping a protective stop underneath the 50-day moving average. It's been a great proxy for support all the way up.