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Tiffany (TIF) - Get Tiffany & Co. Report surged over 4% on Thursday, making it one of the top 15 gainers in the S&P 500. This powerful move drove the stock to its best levels in over 12 weeks as upside trade jumped. Tiffany is now up over 12% from last week's low and is set up well for more upside.

During the Brexit flush in late June, Tiffany reached a new 52-week low. The stock sliced through major support near the January/February lows as downside pressure soared. Despite this ugly breakdown, further damage was very limited, and with the help of a divergent moving average convergence/divergence low, Tiffany rebounded quickly. The stock drifted higher through July but was unable move past a solid supply zone near the March low. As August began, the stock began to sell off again, but this phase ended with a second straight higher monthly low and a powerful upside reversal. The follow-through from the Aug. 3 spike low has been very impressive.

On the opening bell Thursday, Tiffany took out a significant resistance zone. With this level, which includes the June and July highs, convincingly cleared, the stock has left behind what could develop as a major base. In the near term, Tiffany bulls should consider the stock a low-risk buy between $65.50 and $64. This solid support zone should offer the footing needed for a fresh rally leg. On the downside, a close back below $63 would violate this week's low, indicating that more basing is ahead. On the upside, the initial target is the declining 200-day moving average near $69. A pullback from this level is to be expected. Tiffany hasn't closed above the 200-day since early August of last year.

Of note, Tiffany's short interest ratio is over 9. This excessive amount of bearishness will add fuel to the rally. Tiffany reports its second-quarter results on Aug. 25.

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Disclosure: This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.