NYSE:VMW may be ready to 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.

Technical analysis of NYSE:VMW

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.

We assign a technical rating of 8 out of 10 to VMW. Although VMW is only a medium performer in the overall market, the technical picture looks good in both the medium and short term time frames.

• The long and short term trends are both positive. This is looking good!
• VMW is one of the better performing stocks in the Software industry, it outperforms 80% 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.
• When comparing the yearly performance of all stocks, we notice that VMW is one of the better performing stocks in the market, outperforming 71% of all 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?

ChartMill also assign a Setup Rating to every stock. With this score it is determined to what extend the stock has been trading in a range in the recent days and weeks. This score also ranges from 0 to 10 and is updated daily. The setup score evaluates various short term technical indicators. NYSE:VMW scores a 9 out of 10:

Besides having an excellent technical rating, VMW 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 124.76, a Stop Loss order could be placed below this zone. Very recently a Pocket Pivot signal was observed. This is another positive sign.

How to trade NYSE:VMW?

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.