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TheStreet Open House

5 Stocks Poised to Break Out

WINDERMERE, Fla. ( Stockpickr) -- U.S. stocks are under mild selling pressure today, following a sharp spike higher in the previous session as new more negative sentiment continues to flow out of the troubled euro zone.

At last check, the Dow Jones Industrial Average was trading down 37 points, and the S&P 500 was off by 2 points. The tech-heavy Nasdaq was bucking the weakness and treading up slightly by 3.9 points.

One of the major reasons for the selling pressure today is due to the euro, which fell to a 16-month low against the dollar, dropping below $1.27, after ratings agency Fitch urged the ECB to step up buying of euro zone debt to prevent a "cataclysmic" collapse of the euro.

>>5 Stocks Under $10 Set to Trigger Big Moves

Despite the continued negative news flow out of Europe, many U.S. stocks are bucking the market weakness and trending higher. Some examples of strength in today's session are Google (GOOG), Human Genome Sciences (HGSI), Transcept Pharmaceuticals (TSPT), Diamond Foods (DMND) and Sears Holdings (SHLD).

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. Whenever a stock breaks out, it can be an early technical signal of a much larger move to come.

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 trade higher from current levels.

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