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5 Stocks Poised for Breakouts

WINDERMERE, Fla. (Stockpickr) -- U.S. stocks are stuck in a tight trading range today as market players digest news that China plans to stick to its commitment to invest in the battered eurozone and that European finance ministers were potentially going to delay payments on the latest bailout deal.

China's Central Bank Governor Zhou Xiaochuan said that China would play a role in helping Europe come back from its sovereign debt issues. It sounds like China is waiting until it knows for sure that Greek deal is going to get done before stepping in to the market and making a big capital commitment.

At last check, the Dow Jones Industrial Average was trading lower by 34 points, and the S&P 500 was advancing by 2 points. The tech-heavy Nasdaq was leading the major indices, jumping higher by 15 points. Despite the narrow range in the overall markets, a number of stocks are knocking on the door of major breakouts.

>>6 Stocks Funds Love for 2012

One of the most powerful technical moves that you can trade in the markets is when a stock triggers a major breakout. Just take a look at the monster move higher in Apple (AAPL) from when I highlighted it here for a breakout trade. Shares of Apple soared right after it broke out above its former all-time high of $460 to its current price of $517 a share in just a couple of weeks. That's a move of over 70 points in a very short timeframe.

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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