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5 Stocks With Breakout Potential This Week


2012 is shaping up to be a stellar year for social game developer Zynga (ZNGA - Get Report), a $9.3 billion firm that went public back in December. Despite a rocky start to life as a publicly traded company, shares of the firm have rallied more than 40% in the new year.

Now that there's some trading history behind shares, traders should feel a bit more confident about taking on the setup in Zynga.

There's more to trading a recent IPO than meets the eye (for more on how to trade an IPO, check out Stockpickr's primer on the subject). In Zynga's case, the firm just completed a short-term ascending triangle, breaking out above the $13 resistance level in yesterday's session. Remember, that's the same pattern that we just looked at in LEG.

Right now, there's a strong short-term setup in buying Zynga in anticipation of a test of $14.50 resistance. That said, the much more attractive setup comes if Zynga can successfully push above that $14.50 all-time high. Because it's a place where shares have historically stalled a couple of times, a move above $14.50 sends a strong signal that buyers are in control of ZNGA right now. More risk-hungry traders can be buyers now.

Zynga shows up on recent lists of 4 Companies Riding Facebook's Wave and 3 Tech Stock Leaders of 2012.

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ZNGA $2.39 1.70%
JPM $62.13 0.26%
LEG $45.37 -0.83%
MSFT $43.06 -0.52%
SINA $36.81 0.14%


DOW 18,096.90 -106.47 -0.58%
S&P 500 2,098.53 -9.25 -0.44%
NASDAQ 4,967.1410 -12.76 -0.26%

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