NEW YORK (Real Money) -- I wish I had a dollar for every time I read a tweet or an article about Pandora's (P) demise. And while the stock has had its share of struggles, suddenly it is coming back to life. Maybe it is the demise of Grooveshark or maybe it is something else here. What I do know is looking at its chart, there is potential for a move higher if just a few more buyers step into the fray.
Pandora has spent 100 days recovering from a rough February. The current bullish channel is meeting resistance formed in December and February, just before the big break lower. The pattern in February looked very bullish, but fundamentals trumped any breakout. So what's to stop that from happening again?
The biggest plus is that earnings are out of the way, so as long as Pandora holds $18 on a closing basis, the stock should continue to march higher. A close over $18.85 would get those pesky old highs out of the way. The immediate upside is $19.50, but I would target $21.50 as the end of the summer target.
The technical picture is actually stronger than the price here. The Relative Strength Index has held over 50 since the channel started and still has room to the upside here. The vortex indicator is a bit muddled, but that's representative of the current consolidation of price just below those aforementioned highs. And we finally have a bullish crossover on the slow stochastics after a consolidation retracement. All of this points to an attractive risk-reward on an upside move. Given a stop is about $60, risk is out of hand here at just above 3% compared to an upside in the 5% to 15% range.