Sleep Number ($SNBR) may soon be in play as an explosive breakout trade. Here’s why we like it…
Bedding manufacturer Sleep Number ($SNBR) has formed a bullish basing pattern since stalling at $52 in late July.
The pullback from its recent peak is 28% deep (less than 30% is healthy), as the stock found support at its rising 200-day MA in early September, then again in late September/early October.
The price action recently cleared resistance at $45, and is now forming a short-term consolidation above the rising 20-day exponential moving average, which has crossed above the 50-day moving average.
The daily chart below shows how the stock may be setting up for a potential breakout swing trade soon:
Note the big volume spike on October 16 was not a bearish distribution day because the price closed above the middle of its intraday range.
We are looking to buy $SNBR on a move back above its short-term downtrend line shown on the chart above. We will be looking for such a rally to be confirmed by higher volume.
As always, regular subscribers of The Wagner Daily will be alerted of our exact entry, stop, and target prices for this trade setup when it triggers for buy entry.
Remember to always use and honor your stops!
