5 Stocks Setting Up to Break Out

WINDERMERE, Fla. (Stockpickr) -- U.S. stocks are soaring today and following through from Friday's strength after reports surfaced from The Wall Street Journal that the Federal Reserve is considering a scheme to buy more mortgage bonds, with the aim of lowering rates to get the housing market going again.

At last check, the Dow Jones Industrial Average was up over 80 points while the S&P 500 has jumped over 10 points. The tech-heavy Nasdaq has also adding over 50 points as Wall Street continues to move through the thick of earning season.

If the Fed does indeed embark on more quantitative easing, then we could easily see much higher stock prices from current levels for the U.S. equity markets. In fact, all of the U.S. indices are now trading in breakout territory, since the Dow has traded over past resistance at 11,716.94, the S&P has crossed over resistance at 1233.10, and the Nasdaq has taken out resistance at 2667.85.

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The top traders in the world know that markets are made up of thousands of stocks in different sectors. With so many moving parts, there's always some sector or stock that's acting strong and setting up to breakout. 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 are setting up to break out and trade higher from current levels.

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