NEW YORK (TheStreet) -- Good day traders!
1. First, let's look at Home Inns & Hotels Management, which develops, leases, operates, franchises and manages economy hotels under the Home Inn, Yitel and Motel 168 brands in the People's Republic of China.
Home Inns traded up 3.79% on Monday, closing at $31.80 per share.
- Monday's range: $30.52 - $31.84
- 52-week range: $23.93 - $44.17
- Monday's volume: 225,412
- 3-month average volume: 346,939
Home Inns is a rounded bottom breakout chart pattern. This chart triggered as a rounded bottom breakout on May 27, and has been confirming since. The stock is staying just above the 50-day simple moving average. Yesterday it formed a nice large bullish candle and closed above the previous days closes.
Look for price action to move higher today and close higher on the breakout.
Home Inns reached its six-month low on May 7, and has traded up almost 20% since then. Now shares are consolidating on the 50-day simple moving average, forming a base to work from. The 50 is acting as a solid support.
Look to enter this trade above the 20-day simple moving average -- anywhere within yesterday's range of $30.52 to $31.84. I'd set a stop at about $29.70, or if you'd like it a little tighter, I'd set it just below the 50.
I would target the 200-day simple average at $35.38, and let the trade work on its way up. There is 10% potential gain to the 200 from yesterday's close. Expect some consolidation and dips on the uptrend. Pullbacks and dips are great opportunities for adding to your positions. Start with a 1/4 position, and add to it as the trend is working.
Stay long until you see a confirmed sell signal or a close below the t-line.