NxStage Medical

One stock that recently triggered a major breakout is NxStage Medical (NXTM), a medical device company that develops, manufactures and markets products for the treatment of kidney failure, fluid overload and related blood treatments and procedures. This stock is off to a solid start in 2012, with shares up over 20%.

If you look at the chart for NxStage Medical, you'll see that this stock was sold off hard by the bears from its October high of $24.06 to a recent low of $15.42 a share. After hitting that low, the stock saw massive upside volume flow in as buyers found tremendous value. The stock then ran from $15.42 to its current price of around $21.40 a share. That run saw NXTM break out above some past overhead resistance at $20.05 to $20.13 a share on monster volume.

Traders should now watch NXTM to trigger its next big breakout once the stock moves above some near-term overhead resistance at $21.43 with volume. Look for volume on any move above that levels that registers near or above 559,600 shares. At last check the stock has hit a high today of $21.50 and volume is just over 100,000 shares traded. If we get that action, then this stock has an excellent chance to make a run at its October high of $24.06 a share, or possibly much higher.

Traders should now look for long-biased trades as long as NXTM is trending above $20 to $21.43 a share, and the upside volume is tracking in strong.

This stock also sports a very high short interest, since 11.5% of the tradable float is currently sold short by the bears. That high short interest could easily fuel a big short squeeze that spikes this stock big soon since the stock is starting to move above $21.43.

I also featured NxStage recently in " 7 Stocks Rising on Huge Volume."

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