Dean Foods Up 21.6% in Three Days - Time to Cash in?

It has been a busy

for Dean Foods

. Share prices have reflected that activity, launching 28 percent percent over the past seven trading sessions - 21.6 percent of that coming in the last three sessions. Less than three months ago, the stock was trading in the mid $11 range, which would equate to a 56 percent increase in that time. Such large moves are often met with waves of selling, however, as investors cash in on their positions. Friday's action may be signaling that such an event may be in the near future. As the six-month daily chart below shows (click to enlarge), the stock recently broke out of its trading channel and has made a strong run since. Shares hit a 52-week high of $18.63 in Friday's session, but came under heavy selling pressure shortly after (traded down to $17.50), finishing the day at $18.30. The fact that the stock recovered from the early sell off can be viewed both in a positive and negative light. On one hand, shares recovered their early losses. On the other, it showed that there are a number of investors looking to get out at these price levels. In this case, winners and/or losers can be easily identified, as any break above the 52-week high would signify further strength, while a break below $17.50 would indicate that Friday's sellers were correct to get out. For those looking to get long, use the 52-week high as a reference point. Any break/close above $18.63 would signify continued strength and coincide with a probable move higher. Waiting for a 50 percent retracement of the recent move ($16.50) may serve as a good entry point - should the opportunity arise. Conversely, shorts looking to enter at these levels are presented with a good risk/reward ratio if the 52-week high is used as a stop out point, as the stock is prone to large swings in both directions. Currently, shares are pushing well above the Bollinger band indicator, and the MACD is showing signs of divergence, as it is not rising as quickly as the prevailing stock price. Time will tell.