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 Poised for Breakouts

China Automotive Systems

A stock in the auto and truck parts sector that could be setting up to break out soon is China Automotive Systems (CAAS - Get Report), which engages in the manufacture and sale of power steering systems and other component parts for the automotive industry in the People's Republic of China. This stock has been destroyed by the bears so far in 2011, with shares off by over 60%.

If you take a look at the chart for China Automotive, you'll see that this stock has been destroyed, dropping from its April high of $10.44 a share to its current price of just over $5 a share. That massive slide lower in the stock has now taken it below both its 50-day and 200-day moving averages, which is bearish. That said, the stock has also started to make higher lows in the short-term, which could be signaling a change in the bearish behavior. Shares of CAAS are also approaching a big breakout if the stock can manage to trade and close above some past overhead resistance at $5.43 and it's 50-day moving average of $6.07 a share.

Market players should watch for a breakout trade if CAAS can manage to trade and close above those levels I mentioned above on solid volume. Watch for volume that's tracking in close to or above its three-month average action of 190,000 shares. If this breakout does happen, then this stock could soar to $8 to $9 a share quickly.

Related: Cramer's Good-News-in-Trucking Stocks

One could be a buyer of this stock on any weakness and anticipate the breakout. I would use a stop just below $5 a share since a drop under that level would snap the recent pattern of higher lows. Another way to play this is to buy strength and buy it once it breaks out over $5.43 and $6.07 a share with volume.

This is another heavily shorted stock with around 9.3% of the float sold short by the bears. Any breakout for this stock in the coming days or weeks could easily spark the short-sellers to cover some of their profitable bets and buy the stock back for a big bounce.
4 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
ZINC $2.62 0.00%
CAAS $6.04 0.00%
SIMO $33.22 0.00%
RPTP $6.65 0.00%
VVUS $1.38 0.00%


Chart of I:DJI
DOW 17,798.49 -14.90 -0.08%
S&P 500 2,090.11 +1.24 0.06%
NASDAQ 5,127.5250 +11.3820 0.22%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs