One specialty retail player that's starting to move within range of triggering a big breakout trade is Staples (SPLS) , which operates office products superstores. This stock has been under some selling pressure so far in 2014, with shares off by 14%.
If you take a look at the chart for Staples, you'll notice that this stock recently formed a double bottom chart pattern at $10.70 to $10.82 a share. Following that bottom, shares of SPLS have started to uptrend with the stock moving back above its 50-day moving average. That uptrend has now quickly pushing shares of SPLS within range of triggering a big breakout trade above some key near-term overhead resistance levels.Traders should now look for long-biased trades in SPLS if it manages to break out above some near-term overhead resistance at $11.83 a share to its gap-down-day from May at $12.14 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 9.31 million shares. If that breakout triggers soon, then SPLS will set up to re-fill some of its previous gap-down-day zone from May that started just above $13.20 a share. Traders can look to buy SPLS off weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $11.21 a share. One can also buy SPLS off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point. Read More: 5 Toxic Stocks You Need to Sell Now
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