Our major indices have been consolidating for many weeks and that's enabled many individual stocks to consolidate in bullish continuation patterns. Dycom Industries (DY) is one such stock as it formed a long-term cup from early-August to late-February before printing a handle throughout March. The right side of the cup showed very heavy volume before volume tailed off as the handle formed. This week DY has broken out on extremely heavy volume as you can see below:
The blue arrow shows that volume is about double of any week over the past six weeks and there's still one more day left this week. A pullback to test the breakout level just below 100 would be the best entry price, while the target would be the measurement of this pattern. That measurement would be roughly 125.
Happy trading!
Tom
