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OfficeMax Could Supply Traders With 20%-Plus Gains

OMX broke from a quadruple-top following a test of its bullish support line


OfficeMax (NYSE:OMX) — This company distributes business and retail office products through a network of over 1,000 stores. The consensus estimate shows a widening of operating margins in 2013 as a result of management’s cost-control program. Earnings for 2012 are expected to reach $0.75, up from $0.38 in 2011. Analysts’ estimates for 2013 range from $0.76 to $0.92.

On Thursday, the company announced an agreement with Go Daddy’s Web services to bring that service to a wider small business audience through Office Max stores. It makes OMX the exclusive retailer for Go Daddy websites and domain names, and offers businesses the value of that site’s service bundles available at OfficeMax stores.

The stock broke from a quadruple-top on Tuesday, following a test of its bullish support line and 50-day moving average and a buy signal from our proprietary indicator, the Collins-Bollinger Reversal (CBR).

This breakout is similar to the break from a continuation gap in mid-November that led to new highs. The near-term target for OMX is $13, but longer term it could achieve even higher prices.

OMX Chart
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Trade of the Day Chart Key

Article printed from InvestorPlace Media,

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