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Breakout Stocks: Warner Chilcott, Alliance

If you're looking for a stock that is breaking out to new all-time highs, look no further than Warner Chilcott (WCRX). This company is a Bermuda-based specialty pharmaceutical company focused on the women's health care and dermatology segments of the U.S. pharmaceutical market.

This stock is just starting to break out to new all-time highs as the shares push through some previous resistance at around $29.25 a share. Helping to fuel this breakout was the company's announcement on Friday that it had completed a loan and debt offering needed to pay a special dividend of $8.50 a share. The dividend will be payable on Sept. 8 to shareholders of record as of Aug. 30.

This stock will most likely push higher into Aug. 30 as some of the bears who're short the stock cover their positions to avoid having to be on the hook for that big dividend. This should create some decent trading opportunities for the fast traders. However, once the dividend is paid out, the stock will probably fall around the same amount of the $8.50 payout.

If you think the strength in Warner Chilcott is real, than I would wait until after Sept. 8 to consider the stock from the long side.

More on Warner Chilcott

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