Bull Chart of the Day -- Gotta Get Garmin

NEW YORK (Real Money) -- This stock has spent the last four months in a downtrend, and year to date Garmin  (GRMN) is down over nearly 12% but the price action appears to be changing here. Thursday's move in Garmin saw price break above two resistance lines.

While Garmin did poke its head over the four-month downtrend line (solid blue line) last week, it failed and quickly retested the April low. On the surface, this looked very bearish, but the bounce over the last three days makes it appear the selloff was most likely a bear trap.

We are seeing new highs in the RSI here, a solid bullish divergence, as price is not even to the April highs for the stock. Volume has increased as well. Note the selloff came on lower volume than the previous week, yet the bounce has come on higher volume.

I expect Garmin to push back into the $48s, possibly as high as $49.50. One approach on this one could be playing the $44 double bottom and selling some slightly out-of-the-money put spreads targeting $44 or $45.

While I have tempered expectations for Garmin, they are still bullish expectations here. This is similar to the tempered bearish expectations I have for Cabot  (CBT). Garmin and Gabot are two names I see headed in opposite directions over the next few weeks.

Editor's Note: This article was originally published at 9 a.m. EDT on Real Money on June 19.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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