Up first is Diageo ( DEO), a stock that I talked about in last week's column. Diageo has spent the last several months bouncing within an ascending triangle pattern, and now this week's confirmed breakout is making DEO worth a second look.

The ascending triangle pattern is a bullish setup that's formed by horizontal resistance above shares and uptrending support below shares. As DEO bounced within the channel, it was getting squeezed closer and closer to a breakout above that $120 resistance level. When the move finally happened, it triggered our buy signal in this stock.

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Because Diageo had seen a false breakout earlier in the month, waiting for confirmation (in the form of holding the breakout for more than one trading session) was critical. Now looks like a good time to be a buyer in DEO. If you decide to jump in here, I'd still recommend keeping a a protective stop at the 50-day moving average.

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