5 Stocks Poised for Breakouts

Endologix

One more stock that's very close to breaking out and potentially moving much higher is Endologix (ELGX), which develops, manufactures, markets and sells treatments for aortic disorders. This stock is off to a respectable start in 2012, with shares up around 14%.

If you look at the chart for Endologix, you'll notice that this stock has been uptrending huge for the past six months, with shares consistently making higher lows and higher highs. That uptrend has taken ELGX from $8.61 to its current price of around $13 a share. That's a huge gain already, but it could be far from over if ELGX manages to trigger a near-term breakout trade.

Market players should watch shares ELGX for a breakout trade if this stock can manage to clear some near-term overhead resistance at $13.67 with high volume. Watch for a move over that level where volume hits near or well above its three-month average action of 380,321 shares. A sustained high-volume move and close above that resistance level should set this stock up for a spike back towards $15 to $17 share or much higher very quickly.

Traders should look for long biased traders in ELGX as long as the stock is trending above $13.67 with strong volume flows. Look for near-term support at $12.45 to hold if you get long off weakness and anticipate the breakout. This is another stock with a decent short interest since 8% of its tradable float is currently sold short by the bears. That high short interest could spike the stock big if the breakout triggers soon, so make sure to put this one on your trading radar.

To see more breakout candidates, including AutoNavi (AMAP), Staples (SPLS) and MAKO Surgical (MAKO), check out the Breakout Stocks of the Week portfolio on Stockpickr.

-- Written by Roberto Pedone in Winderemere, Fla.

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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.

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