5 Stocks Setting Up to Break Out

Raven Industries

One stock that's just starting to break out today is Raven Industries (RAVN), an industrial manufacturer providing a variety of products. This stock has been a big winner in 2011, with shares up over 30%.

If you take a look at the chart for Raven Industries, you'll notice that the stock has just started to break out toady above some near-term overhead resistance at $61.43 a share. If this breakout can hold into the close, then RAVN will set up to challenge an even bigger breakout above some more near-term overhead resistance at $63.50 and $64.88 a share. A high-volume move and close above those levels will push RAVN into all-time high territory, which is bullish price action.

>>Stocks Rising on Unusual Volume

Traders should now watch for RAVN to close over $61.43 to $63.50 today on solid volume. Look for volume that's near or well above its three-month average action of 61,945 shares. If we get that action, then look for RAVN to take out $64.88 with volume in the near future.

One could be a buyer of RAVN off any weakness and simply place a mental stop just a few percentage points below the breakout level of $61.43 a share. I would then add to any long positions if we take out $64.88 with volume, since that will set the stock up to push into all-time-high territory.

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