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TheStreet Open House

5 Breakout Stocks to Eye for a Buy

Stocks in this article: CYOUDATESIFYREDFOXGNMPELMVGOPXT

WINDERMERE, Fla. ( Stockpickr) -- The Nasdaq and S&P 500 were under some selling pressure Friday after a pair of heavyweight corporate earnings failed to meet Wall Street expectations, despite a trio of strong results from some blue-chip names that kept the Dow index trading to the upside.

IBM (IBM) and Intel (INTC) helped to give the Dow strength a day after IBM issued a bullish earnings outlook, and Intel said it would boost capital spending in 2012. However, weakness at General Electric (GE) and Google (GOOG) put pressure on the on the broader indices.

At last check, the Dow Jones Industrial Average was trading up 55 points and the S&P 500 was off by 4.3 points. The tech-heavy Nasdaq was sliding lower by 9.8 points.

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 breaking out. Once a technical breakout is triggered, it can lead to big buying that will push any stock significantly higher.

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 to 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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