Stocks Want to Break Out

From an index perspective, it has been a fairly dull day so far. We've had seen tight ranges now for a few days, which will likely frustrate traders. I'm wondering if the market is finally going to lose some momentum. Many stocks are certainly in breakout mode. There are a few stocks that are breakouts of the blind, they are so obvious.

Alcoa (AA) is being talked about everywhere I look. The stock tried to break out of an ascending triangle. The momentum is good, but not great. The money flow is good, but not great. The stock is trading near the high end of the Bollinger Bands, but it feels too obvious and too crowded at the moment. Unless I see a close above $12.40, the chance of a pullback far outweighs a breakout right now. The stock can call down near $11.65 and not risk breaking the trend line. I would rather give up $0.20 or $0.25 upside to avoid $0.50 of downside....229 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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