SunTrust is on the verge of a breakout.

Since STI’s powerful breakout in early February(BB&T merger news: ), the stock has been treading water. STI made a slightly higher high soon after the announcement but by early March the upside momentum had eased. The stock has been trading in a narrowing range since. After nearly five months of this consolidation a breakout is beginning to develop.

In today’s early going STI is up over 1.4% and is a top ten gainer in the S&P 500 Index. This rally is driving shares past a key overhead trendline that links the April and June highs. If the stock can finish today’s session above $64.60 it will mark the best close since May 6th.

STI has very solid footing underneath and has a long way to run before entering overbought territory. We consider the stock a low risk entry near current levels. On the upside a clear take out of the June high($64.95) would be an important hurdle. On the downside a close back below last week’s low($62.30) sending a clear warning sign that more consolidation is ahead before a fresh rally leg can take hold.

Earnings are due July 18th(AM).

At time of publication we are long STI in some managed accounts.