Another stock thats quickly moving within range of triggering a major breakout trade is Ubiquiti Networks (UBNT), which develops high performance networking technology for service providers & enterprises. This stock has been a favorite target of the bulls so far in 2013, with shares up huge by 249%.
If you look at the chart for Ubiquiti Networks, youll notice that this stock recently formed a double bottom chart pattern at $36.72 to $36.30 a share. Following that bottom, shares of UBNT have started to uptrend and move back above its 50-day moving average of $39.84 a share. Shares of UBNT have also started to break out above some near-term overhead resistance at $40.59 a share. That move is quickly pushing this stock within range of triggering an even bigger breakout trade.
Traders should now look for long-biased trades in UBNT if it manages to break out above its all-time high at $44.80 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average volume 917,916 shares. If that breakout hits soon, then UBNT will set up to enter new all-time high territory, which is bullish technical price action. Some possible upside targets off that breakout are $50 to $55, or even $60 a share.
Traders can look to buy UBNT off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day moving average of $39.85 a share. One can also buy UBNT off strength once it starts to take $44.80 a share with volume and then simply use a stop that sits a comfortable percentage from your entry point.