Swing Trader

Good morning traders. We’ve been waiting patiently for Nuestar, Inc. (NSR) to report earnings. The company did that last evening, but did not trade after hours, so it is not clear how the market will react to the new information. However, from a technical perspective, we’re looking for the stock to trade higher. Please observe the chart below.

The blue lines illustrate a cup & handle pattern formed by NSR over the past eight months. The higher low is noted to underscore the fact that the handle portion of the pattern (descending blue lines) did not undercut the bottom of the cup which is labeled “Low” which otherwise would have negated the bullish pattern.

The better than expected forward guidance provided by NSR last evening may be the catalyst the stock needs to breakout and trade up to the top of the cup around 30.00 (magenta line).