If we take a step back and look at where stocks are in the bigger picture, there is plenty of reason to believe the broader market should be taking a breather soon before pushing higher in the context of this longer-term secular bull market.

More than five years after the 2009 bottom, through a cyclical lens, stocks are getting a little long in the tooth. And considering the potential seasonal headwinds in September and October, this could be an opportune time for the market to pause. However, price action thus far continues to defy any cyclical or seasonal headwinds, and fighting this trend has been an expensive battle for the bears.

#-ad_banner-#​While the broader market is higher for 2014, I am finding an increasing number of stocks that spent the better part of the year simply consolidating their 2012-2013 rallies that look ready to push higher. Athletic footwear and apparel extraordinaire Nike (NYSE: NKE) is among that group.

The blue-chip stock is flat in terms of performance so far this year. However, NKE did see its fair share of price movement over the past eight months.

Shares are challenging their late 2013 highs above $80, briefly cracking them last week before pulling back. I think we are likely to see a significant breakout of this level to the upside sooner rather than later.

Looking at the weekly chart of the Consumer Discretionary Select Sector SPDR ETF (NYSE: XLY), broadly speaking, the movement has been sideways to slightly higher since late 2013. We can mark this type of action as consolidation, and that’s bullish (until it is bearish).

Two weeks ago, XLY broke to a marginally higher year-to-date high, and then went on to make a series of fresh highs. Considering the big base it built this year, and the fact that momentum as measured by the Relative Strength Index (RSI) is curling back up, this rally could continue for a while longer.

The weekly chart of NKE looks similar to that of XLY, which is to say that the wind is at the bulls’ back.

Note the consolidation phase since late 2013, which helped form a big ascending triangle. This is a bullish pattern that often leads to a meaningful breakout. The RSI is moving back up as well.

On Tuesday, NKE rallied close to 1%, which may have been the result of news that Oklahoma City Thunder star Kevin Durant extended his contract with the company after reportedly being offered a significant deal by Under Armour (NYSE: UA). Of course, this bit of news isn’t enough to cause a sustainable rally, but it helped push the stock back toward key year-to-date resistance at $80.

I often discuss that the more a resistance/support line gets tested, the stronger the eventual breakthrough is. In the case of NKE, the $80 area looks increasingly vulnerable to giving way to higher prices. This is supported by moving averages and momentum picking up a little steam.

Since late 2013, this resistance level has been challenged four times without success. This time, however, the move toward $80 has been a few months in the making, and the steady ascent looks determined to continue through the resistance area.

The 50-day, 100-day and 200-day moving averages are all supporting the stock, and with the consumer discretionary sector looking bullish, a breakout is likely.

Recommended Trade Setup:

— Buy NKE on a break above $80
— Set stop-loss at $77.50
— Set initial price target at $86 for a potential 8% gain in 4-8 weeks

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This article originally appeared on ProfitableTrading.com: Blue Chip Less Than $2 Away From a Breakout ‘Buy’ Signal​