Insulet Corp. - PODD - close: 44.51 change: +0.76

Stop Loss: 42.95
Target(s): 49.85
Current Gain/Loss: unopened

Entry on February -- at $--.--
Listed on February 12, 2014
Time Frame: 2 to 4 weeks
Average Daily Volume = 687 thousand
New Positions: Yes, see below

Company Description

Why We Like It:
PODD is in the healthcare sector. The company makes insulin pump products. The stock's recent strength caught our eye. PODD actually had a quiet end of the year with shares moving sideways from mid November and into January. Then on January 16th shares of PODD exploded higher. The odd thing is that I can't find any news to explain the move. The sharp rally looks like short covering but there was nothing special about the market movement that day to spark any short covering. PODD didn't have any particular headlines on the 15th or 16th of January. The surge in PODD didn't stop until shares neared resistance at $45.00.

Here it is almost three weeks later and PODD has produced a relatively bullish sideways consolidation. Today's display of relative strength (+1.7%) has left PODD on the verge of breaking out past resistance near $45.00. A move past $45 could spark more short covering. The most recent data listed short interest at 17% of the 51.3 million-share float.

I am suggesting small bullish positions if PODD can trade at $45.15. If triggered our target is $49.85. We will plan to exit prior to earnings, which are expected in late February, possibly early March. There is no confirmed date yet.

Trigger @ 45.15 *small positions*

Suggested Position: buy PODD stock @ (trigger)

Annotated chart: