For the upcoming week, I have NanoString Technologies $NSTG on my watch list. There is a lot to like about this stock for a potential swing trade. This stock has a small float, a high short interest, and a good looking chart, which can be a great combination for a short-term breakout. $NSTG has been consolidating nicely since the beginning of March which has led to a rising 50 day moving average that is close to crossing the 200 day moving average; this is a bullish technical indicator known as the Golden Cross. In addition to the possibility of a Golden Cross, the chart is presenting a Symmetrical Triangle, which in combination with the rising 50 day moving average, is another bullish indicator.
In the above chart, note the blue line (50DMA). If it manages to cross the green line (200DMA), and price can break through the top line of the triangle, $NSTG could breakout.
So price is trending in the proper direction and we have some bullish chart signals but, in my opinion, what makes $NSTG one to watch is the combination of a very small float and a very high short interest. Buying pressure for a stock with a high short interest often leads to rapid short covering and an ultimate short-term breakout; this can be particularly acute with a small trading float and can make for a great swing trade.
Below is the float and shares short via shortsqueeze.com:
One negative for traders to consider is that $NSTG has been thinly traded the last two days with around 50,000 shares changing hands.
I will look to get long $NSTG if it can breakout of the triangle and through some near-term resistance at $16.20 with volume that is at or above its average of 125,000 shares.
Disclosure: The author has no position in $NSTG but may take a long position in the next 24-48 hours.