The July 19th rally bar was a nice vertical move on big volume. Price has traded for the last 30 or so days in the upper portion of that move which is also known as a bullish consolidation pattern. You can see a bullish consolidation pattern play earlier when price consolidated inside of the June 29th rally into the 50 DMA. There are back to back bullish consolidation patterns which is a good sign that this one should play out.

Additional factors that contribute to bullishness are:

1. Bullish cross 20 dma over 50 and 200 DMA

2. Price is trading above the 20 DMA

3. Accumulation trend is evident

4. MACD cross likely to occur shortly which should serve as trend confirmation

My bet would be that a close above the 20 DMA should trigger the breakout, but you will need additional higher closes to really be sure. If it closes back below the 20 then process restarts.

Unless there is some news catalyst impending, I would doubt that breakout occurs until some time after Labor day probably in the middle or the end of September.

The stock seems to be on a cycle that favors moves one way or the other in those time frames.

Another thing is that it looks like this stock is prone to shakeouts. Although I have a trigger for a close above the 20 DMA, if you were to see a shakeout with a bid slam down to 10 cents, which is a good support area, then I would lean towards that being the tip off that the big boys are clearing out the suckers before uncorking the lid and letting the breakout build.

I've read that this is a heavily naked shorted stock but I have never watched the L2's or traded it myself, nor do I know the first thing about what they do so this is just the pattern I'm seeing from the trading activity.

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