VMWARE INC-CLASS A is setting up nicely for a breakout.

Our stock screener has spotted VMWARE INC-CLASS A (NYSE:VMW) as a possible breakout candidate. A technical breakout setup pattern occurs when the stock is consolidating after a nice uptrend. Whether the actual breakout occurs remains to be seen of course, but it may be interesting to keep an eye on NYSE:VMW.

What is the technical picture of NYSE:VMW telling us.

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

Overall VMW gets a technical rating of 8 out of 10. This is due to a decent performance in both the short and medium term time frames. Compared to the overall market, VMW is only an average performer.

• Both the short term and long term trends are positive. This is a very positive sign.
• VMW is one of the better performing stocks in the Software industry, it outperforms 81% of 372 stocks in the same industry.
• VMW is currently trading in the upper part of its 52 week range. The market is still in the middle of its 52 week range, so VMW slightly outperforms the market at the moment.
• In the last month VMW has a been trading in the 120.09 - 127.89 range, which is quite wide. It is currently trading in the middle of this range where prices have been consolidating recently, this may present a good entry opportunity, but some resistance may be present above.
• Looking at the yearly performance, VMW did better than 73% of all other stocks. However, this overall performance is mostly based on the strong move around 4 months ago.

How do we evaluate the setup for NYSE:VMW?

Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NYSE:VMW currently has a 10 as setup rating:

VMW has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. There is a resistance zone just above the current price starting at 126.14. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 124.68, a Stop Loss order could be placed below this zone. We notice that large players showed an interest for VMW in the last couple of days, which is a good sign. Another positive sign is the recent Pocket Pivot signal.

Trading setups like NYSE:VMW

For a potential trade one would typically wait until the stock breaks out of the consolidation zone to enter the stock and it could be sold again for a loss when it would fall back below the 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.