Tempur-Pedic International Inc is setting up nicely for a breakout.

A possible breakout setup was detected on Tempur-Pedic International Inc (NYSE:TPX) by our stockscreener. A breakout pattern is formed when a stock consolidates after a strong rise up. We note that this pattern is detected purely based on technical analysis and whether the breakout actually materializes remains to be seen. It could be interesting to keep an eye on NYSE:TPX.

Zooming in on the technicals.

Every day ChartMill assigns a Technical Rating to every stock. The score ranges from 0 to 10 and is determined by evaluating multiple technical indicators and properties.

We assign a technical rating of 8 out of 10 to TPX. Both in the recent history as in the last year, TPX has proven to be a steady performer, scoring decent points in every aspect analyzed.

• The short term is neutral, but the long term trend is still positive. Not much to worry about for now.
• When comparing the yearly performance of all stocks, we notice that TPX is one of the better performing stocks in the market, outperforming 88% of all stocks. On top of that, TPX also shows a nice and consistent pattern of rising prices.
• TPX is part of the Household Durables industry. There are 67 other stocks in this industry. TPX outperforms 80% of them.
• TPX is currently trading in the upper part of its 52 week range. The S&P500 Index however is currently trading near a new high, so TPX is lagging the market slightly.

Looking at the Setup

Next to the Technical Rating, the Setup Rating of a stock determines to which extend the stock is consolidating. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. For NYSE:TPX this score is currently 8:

Besides having an excellent technical rating, TPX also presents a decent setup pattern. Prices have been consolidating lately. A pullback is taking place, which may present a nice opportunity for an entry. There is a very little resistance above the current price.

How can NYSE:TPX be traded?

A breakout could materialize when the stock breaks out to new highs above the current consolidation zone. One could wait for this to happen and buy when this happens. A stop loss could be placed below the consolidation zone.

This article should in no way be interpreted as trading advice. You should always make your own analysis and trade or not trade based on your own observations and style. The article is based purely on some technical observations.

Every day, new breakout setups can be found on ChartMill in our Breakout analyzer.