Gentiva Health Services

Another stock that's setting up to trigger a near-term breakout trade is Gentiva Health Services ( GTIV), which is engaged in providing home health services and hospice services. This stock hasn't done much so far in 2012, with shares up just 5% so far.

If you look at the chart for Gentiva Health Services, you'll see that this stock formed a major top back in April and May at around $9 a share, and then subsequently went on to crash lower to its recent low of $5.13 a share. During that monster move lower, shares of Gentiva Health Services were making lower highs and lower lows, which is bearish technical price action. That said, after tagging that $5.13 low, this stock started to reverse course and uptrend back above both its 50-day and 200-day moving averages. That move has now pushed GTIV within range of triggering a near-term breakout trade.

Traders should now look for long-biased traders in GTIV if this stock can manage to take out some near-term overhead resistance levels at $7.24 to $7.33 a share with high volume. Look for a sustained move or close above those levels with volume that's near or above its three-month average action of 277,416 shares. If we get that action soon, then GTIV will have a great chance of re-testing and possibly taking out that former top at around $9 a share.

One could be a buyer of GTIV off any weakness, and simply use a stop that sites just below its 50-day moving average of $6.79 a share. You could also just buy off strength once GTIV takes out $7.24 to $7.33 with high volume, and then use a stop just under $6.94 a share.

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