One of the common trade setups is the Break Out. There certainly are a lot of varying definitions for what this trade setup can look like, but they all ultimately have one common goal: to catch a stock that is right on the cusp of a big up move, either up through prior resistance or up through a moving average overhead.
A current stock that I am monitoring for a Break Out is PKT (Procera Networks, Inc.). As you can see in the chart below, it is “coiling” just under the 10 level:
Some would argue that the stock may be forming a Cup-n-Handle pattern as it seeks to break up through the psychologically important 10 level. As the rising 20 day moving average below inches closer up to price, I see it forcing more action.
For now I am content with having my price alerts in place and will continue to “stalk” it here as it churns.