TLAB (Tellabs, Inc.) at 4.48 Broke out of the 5-month Wedge Pattern (BUY)

TLAB broke out of a 5-month wedge pattern following the new YTD low at 3.67 (23 Aug). The bullish MACD studies on the daily chart suggest that scope remains for further near-term strength towards 4.68 (Resistance 1). A sustained break there would allow bulls to target 5.47 (Resistance 2) near 50% retracement of the 7.31 (13 Jan 2011 high)/3.67 decline ahead of 5.80 (Resistance 3) near 61.8% retracement.

However, a breakdown below 3.91 (Support 1) would negate and re-open the 3.69/3.67 key support zone (Support 2). A clean loss there would initiate the next leg-down towards 3.52 then 3.10 (03 Mar 2009/10 Oct 2008 lows, Support 3 zone).

Trading Indication:
Short-term (Intraday): Buy at 4.00 or lower;
Target at 4.68 and higher; Stop Loss at 3.90 (2.5%)
Long-term: Possibly sell higher