Monday, February 29, 2016

LPLA: LPL Financial Holdings

Another stock that's starting to move within range of triggering a big breakout trade is LPL Financial (LPLA - Get Report) , which provides an integrated platform of brokerage and investment advisory services to independent financial advisors and financial advisors at financial institutions in the U.S. This stock has been slammed lower by the sellers over the last six months, with shares down big by 49.6%.

If you take a glance at the chart for LPL Financial, you'll notice that this stock recently gapped-down sharply lower from around $26 a share to its new 52-week low of $15.38 a share with monster downside volume flows. Following that move, this stock has started to rebound off that $15.38 low with a number of strong upside volume days. Shares of LPL Financial trended modestly higher on Thursday right above some near-term support at $17.90 a share with strong upside volume flows. Volume for that trading session registered over 1.73 million shares, which is well above its three-month average action of 1.34 million shares. This high-volume spike to the upside is now quickly pushing this stock within range of triggering a big breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in LPL Financial if it manages to break out above some near-term overhead resistance levels at $21 to $21.10 a share and then above more resistance at $21.63 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 1.34 million shares. If that breakout develops soon, then this stock will set up to re-fill some of its previous gap-down-day zone that started near $26 a share.

Traders can look to buy LPL Financial off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $17.90 a share. One can also buy this stock off strength once it starts to move above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

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