Based on my previous post about finding stocks in play, I've identified Cracker Barrel Old Country Store, Inc. (CBRL) as a candidate of an in-play stock. CBRL will release their earnings on Sept 15th before the market opens. So there's only Monday before the earnings and then perhaps a few days after to play this stock.
The price I am watching is \$32.10 based on Figure 1. This is a breakout setup to the long side. What caught my attention is the recent gap up breaking a long term trendline resistance with only moderate volume. And then the lack of a retracement with little volume on the down days (Figure 2).
Stop Entry: \$32.10
Target: \$35. Based on the projecting from breaking the wedge formation of Figure 1. The wedge's height is about \$2.50. So if CBRL breaks out of \$32. The target is \$34.50. But the round number resistance is so close at \$35, so it's likely that the push will reach that level.
Reward / Risk: 2.9 / 0.7 = 4.1 \< 5.
Update:CBRL touched \$35 on September 16, just two days after breaking my stop entry of \$32.10. This was a good trade.
[caption id="attachment_1764" align="aligncenter" width="500" caption="Cracker Barrel Old Country Store, Inc. (CBRL)"][/caption]
[caption id="attachment_1765" align="aligncenter" width="500" caption="Cracker Barrel Old Country Store, Inc. (CBRL)"][/caption]
: http://traderpau.files.wordpress.com/2009/09/2009-09-12-cbrl_prop.png : http://traderpau.files.wordpress.com/2009/09/2009-09-12-cbrl.png