Treehouse Foods is a packaged foods stock showing tell-tale signs of a pending breakout.
The stock is completing a double cup with handle pattern on a nice volatility compression. Pullbacks have shallowed, and the stock now trades in a tight 2% range. This allows for a low-risk entry on the breakout.
We are also seeing volume dry up in this tight range - a sign that sellers have been exhausted and the stock is becoming harder to buy.
I am looking to buy on a move above 43.25 with a stop at 39.75 for an 8% risk.
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