5 Stocks Setting Up to Break Out

WINDERMERE, Fla. (Stockpickr) -- U.S. stocks are trending slightly lower today after official government data showed that the U.S. economy grew more slowly than originally expected in the third quarter. That slower growth was mostly due to corporations drawing down their inventories faster than expected.

Gross domestic product was revised lower to an annual rate of 2% in the third quarter from a previous estimate of 2.5%, according to the commerce department. Although this number is below most economists' estimates, it's still better than the second quarter's anemic growth of just 1.3%.

At last check, the Dow Jones Industrial Average was trading down 40 points and the S&P 500 was off by 3 points. The tech-heavy Nasdaq was sliding lower by 6 points.

>>5 Stocks Set to Soar on Bullish Earnings

If large institutional traders decide to use the recent weakness in equities as a buying opportunity for an end-of-the-year rally, then a number of stocks are going to break out and trend significantly higher. 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 breaking out.

Trading breakouts is not a new game on Wall Street. This strategy has been mastered by legendary traders such as William O'Neal, Stan Weinstein and Nicolas Darvas. These pros know that once a stock starts to break out above past resistance levels, and hold above those breakout prices, then it can easily trend significantly higher.

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

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