Capstone Turbine Corp. (CPST: 0.64 0.00%) broke out of a six-month base in early December, 2007. Volume was ~4x the average of the previous 4 months.

• The huge run after the breakout lasted for a month. CPST pulled back on decreasing volume, testing the 200 day average in January. The stock also bounced from the tip of the triangle, which it broke out from 1.5 months prior.
• For the first half of February, the stock consolidated gains. A Bollinger Band, Average True Range, or NR7 system would probably have screened the stock during this time. It is easy to see the triangle forming, with volatility and volume decreasing.
• On February 25, Capstone Announces New Distributor Agreement for Ecuador. Whether it was this news or the volatility squeeze, it is hard to say, but the stock breaks out on an increase in volume.
• Throughout March, CPST consolidates on support from the January high, eventually bouncing off the trendline established from the January low.
• This bounce leads to a +40% run.
• In late April, CPST pulls back, and for a brief moment RSI(2) < 10. For the rest of April and early May, the stock consolidates within a triangle continuation pattern. Volume increases as the stock moves up.
• Today Merriman initiated coverage with a Buy. Volume swelled, and the stock has plainly cleared the triangle continuation pattern.

 Would you buy this stock, on Tuesday?

Would you wait? If so, for what?