Here’s one to keep your eyes on over the next day or tthree – Country Style Cooking (CCSC).
The stock has formed a nice cup-with-handle pattern dating back to November. The left side of the cup saw prices get cut nearly in half, from around $13.50 down to $7. The shares bottomed out there during the second half of December before shooting back up to $11. This resistance point was the same area of support back in September. The quiet drift lower during the past two weeks created a handle for our cup.
Yesterday the shares spurted from an open just above $10 back up to that resistance point. Will it break through $11? The key will be volume. Ideally, there would be something approaching 100,000 shares of CCSC traded on the breakout day. We are expecting that any breakout would be tested once or twice, either on the breakout day itself or in the following days. There is no need to chase it.
Our plan would be to nibble a bit below $11, then watch to see how things unfold if/when it pushes through resistance.