$NASDAQ:AAOI Bullish Pennant Setup - 77% upside

AAOI is forming a bullish pennant.

Here are my thoughts on a setup.

Buy-in Target:
Conservative - $39.50 after confirmation that a breakout is happening - My signal is when the stock closes above $39.50 with relatively higher volume.
Higher Risk/Reward - Purchase now (~$34) and set a stop loss at a point where it looks like the pennant is breaking down (~$32). This can be tricky because I've seen pennant patterns mutate into flag patterns (go from triangular to rectangular). If that happens they you'd want your stop set at ~$28.

Price Target: $69.34 - I'd probably start a trailing stop quote(%) around $66 with a 5% threshold. Doing this allows the stock to continue to climb, but gives you a stop if momentum starts to collapse.