Cloud Stock Has Clear Buy Trigger

02/07/2012 9:58 am EST

Focus: STOCKS

Following a recent run to new highs, inContact, Inc. (SAAS) looks ready for another breakout, and a close above one nearby level is the signal traders should use to initiate new longs, writes Joey Fundora.

With many individual stocks already extended, most of my best additions to my watch list this past weekend came from some narrow range scans I ran. inContact, Inc. (SAAS) is in a great sector as enterprises continue to look for ways to save money by optimizing their IT strategy.

Real “cloud” offerings—not what you see in commercials—are starting to gain traction and should continue to do well in 2012.

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SAAS just tagged all-time highs a few weeks ago and has been consolidating just under these levels since then. A higher high above Friday’s close could signal a breakout attempt. Longer-term traders may consider waiting for the new highs, but my hunch is that if it can clear $5.30 decisively, then it should continue to new all-time highs.

As always, please carry out your own due diligence and consider your time frame and trading strategy.

By Joey Fundora, trader and blogger, Downtown Trader

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