This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

5 Stocks Setting Up to Break Out


If you're looking for a recent IPO that looks poised to break out, then take a look at Zipcar (ZIP), which operates a car-sharing network. Zipcar provides over 400,000 members, also known as Zipsters, with self-service vehicles that are located in reserved parking spaces throughout the neighborhoods where they live and work. This stock is off to a weak start in 2011, with shares off by around 12%.

If you take a look at the chart for Zipcar, you'll see that this IPO has just started to break out above a key descending trend line that had been acting as resistance on the stock for the past couple of months. In fact, anytime the stock traded near this descending trend line, it failed and immediately trended lower. Now the stock has started to trade above the trend line and it looks ready to make a big run higher.

What trades should watch for now is for a big upside volume to start moving into this stock. I would suggest watching for upside volume that's well above its three-month average volume of 646,000 shares as ZIP starts to challenge some of its overhead resistance prices.

Related: 5 Heavily Shorted Market Leaders Set to Soar

One could simply be a buyer of this stock on any weakness as long as ZIP stays above the descending trend line. I would add to any long position once you see ZIP take out some near-term overhead resistance at $25 to $26.37 a share. A move above those levels could set the stock up for a run back toward its all-time highs of $30.80 a share.

It's worth noting that this stock is heavily shorted by the bears. The current short interest as a percentage of the float for ZIP stands at 16.1%. The short-sellers have also been increasing their bets from the last reporting period by 19.7%, or by about 656,000 shares. This stock could easily be setting up to short squeeze big, so keep this name on your trading radar.
5 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
CDE $7.44 3.62%
GURE $1.48 1.37%
JAZZ $152.00 -0.63%
AAPL $95.03 -2.90%
FB $116.73 7.20%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs