Shares of Under Armour (UA - Get Report)   (UAA - Get Report) are breaking out of a three-month horizontal channel pattern and, with little in the way of overhead resistance, they have the potential to rally as much as 25% from their current level.

The consolidation has seen a contraction in the stock price that suggests the breakout could be volatile, and the technical indicators are pointing higher on multiple timeframes. Under Armour may finally have formed a base and be in the process of reversing its long-term deep downturn.

The stock began making a series of lower highs and higher lows in 2016 forming a large symmetrical triangle pattern on the weekly chart. In October, the triangle uptrend line was penetrated and the pattern breakdown targeted a downside price objective in the $19.00 area. This is where the stock found support and became the current horizontal channel bottom. The relative strength index has moved out of an oversold condition and is tracking higher, reflecting positive price momentum, and the accumulation/distribution line is crossing above its signal average of the first time since the triangle breakdown, suggesting buying interest. Bollinger bandwidth is extremely tight and periods of low volatility like this are often followed by volatile resolutions.

Nature and the market both abhor a vacuum, and the technical adage is that gaps will be filled. A large gap formed in January just above channel resistance on daily time frame, and other then the declining 200-day moving average, nothing is there to impede the stock from rising up to fill the vacuum. Daily moving-average convergence/divergence is overlaid on a weekly histogram of the oscillator and well above its centerline on both timeframes. Chaikin money flow has recently moved above its zero line but will need to stay in positive territory to support any potentially strong rally in the stock. A move that closes the wide overhead gap would constitute a 25% recovery in the stock price.

Under Armour is a speculative long candidate after another strong upper-candle close above channel resistance-turned-support level, using a trailing percentage stop.

The sports apparel manufacturer's UA shares fell 3.2% to $19.68 at Friday's close.

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