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5 Stocks Setting Up to Break Out

WINDERMERE, Fla. (Stockpickr) -- U.S. stocks are dropping sharply today as the market deals with some serious rumors of a potential debt default for Greece that could happen over the weekend. This time the rumors actually have some validity since Greek credit default swaps are soaring to new highs. Many market observers fear that a Greece default could spiral out of control and lead to more details out of other PIIG nations such as Italy and Spain.

Recently the Dow Jones Industrial Average was plunging by over 325 points to 10,969, and the S&P 500 was off by 29 points to 1157. The tech-heavy Nasdaq was lower by 63 points at 2466.

Huge down days like today are a great time for market players to identify the sectors and stocks that are not being taken to the woodshed. If the bears can't knock a sector or stock down today, then it could mean there's an underlying bid that should be ignored. This is an easy way for traders to identify relative strength in the markets.

Related: 4 Stocks to Buy to Be Like Buffett

The most obvious strength today is coming out of the semiconductor sector. Semiconductor stocks trading higher today include Micron Technology (MU), Marvell Technology (MRVL), Entropic Communications (ENTR), Texas Instruments (TXN) and Novellus Systems (NVLS). These are just some of the names that warrant a deeper look, with an over-300-point drop on the Dow failing to push these lower.

The top traders in the world know that markets are made up of thousands of stocks and tons of sectors. With so many moving parts, there's always some sector or stock that's acting strong and doing its own thing. Trading breakouts is not a new game on Wall Street. This strategy has been by legendary traders such as William O'Neal, Stan Weinstein and Nicolas Darvas.

Here's a look at a number of stocks that look poised to break out and trade higher from current levels.

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