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Breakouts for Jan 27th: The first pick, SGTL, gapped up on heavy volume following the release of its earnings yesterday after hours and an analyst upgrade this morning. The large gap is likely to be tested over the coming days, so GTC orders around $37.80 should be used to complete a position in the stock. The stock sports good technical strength led by new highs in on-balance-volume. The MACD trigger line has crossed over although there may be some concern about a potential bearish divergence here and in slow stochastics (also chaikin money flow on the Gallery chart). It will take a sequence of days with closes near the day highs to negate such developments. The stock has a point-n-figure target of $53.00, but I have set the target at psychological $50 resistance. The second pick, APPB, was boosted today by strong same-store sales. This was another stock to gap up strong so I would watch this for ventures back into the gap. Some GTC buy orders around the mid-$26s should avail of such price moves. The stock has spent the best part of the year trading between $22.50 and $28.00 so a move above $28 will be very bullish for the stock. Technicals are led by a breakout in on-balance-volume, followed by a MACD crossover 'buy' above the bullish zero line, and a crossover of the bullish mid-line of slow stochastics. As with SGTL I have set the price target at $50 psychological resistance. The point-n-figure target is $53.50. Also note the triple top breakout on the point-n-figure chart. The third pick is HYSL, finished strong in late afternoon trading. The initial boost came from an analyst upgrade during the pre-market and some PR in the afternoon. Today also marked a triple-top breakout on point-n-figure charts with an upside target of $75.00. The stock sports some mixed technicals - slow stochastics in particular look weak following a confirmed test of new resistance. The MACD trigger line is above the zero line but is declining, similarly, on-balance-volume has started to deteriorate. Fundamentally, it carries strong Investor Business Daily rankings - but should it close the breakout gap I would exit, or look to go short (as this would leave behind a bull trap).

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"IBD" refers to Investors Business Daily

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