Take a look at the stock chart of Fitbit Inc (NYSE:FIT) over the last week. Not only is the stock up off its 52 week lows, there is a bullish pattern formation nearing major breakout. In addition, as the markets are taking a beating today, Fitbit Inc is slightly higher, showing great accumulation.
Last quarter, Fitbit Inc reported solid earnings and actually shot sharply higher. However, bearish sentiment and shorts pushed it back down. After tagging the significant even-number $5 in recent weeks, things appear to have changed. The shorts are no longer able to push it down and the bull flag formation over the last few days is nearing blast-off.
The key to the breakout is price trading above the daily 50 moving average. Once that happens, it likely squeezes to the daily 200 moving average at $7.95. That means there is a possible profit of 50%. This is a fantastic risk/reward trade setup.
