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TheStreet Open House

5 Stocks Setting Up to Break Out

Stocks in this article: TSLAPETDFIOMAKOGALE

WINDERMERE, Fla. ( Stockpickr) -- Stocks are trending slightly lower in early trading Friday as market players continue to worry about the recent spikes higher in crude oil prices. The concern is that if oil prices continue to ramp higher, then higher gasoline prices will put a massive dent in consumer spending and derail the economic recovery.

Despite that concern, the S&P 500 is still on track to potentially close for its ninth straight week of gains, which would be the longest winning streaking for this major index since the end of January 2004. The Nasdaq is now within range of closing above the psychologically important 3,000 level, and the Dow Industrial Average is within range of the psychologically key 13,000 area.

At last check, the Dow was trading lower by 13 points, and the S&P 500 was trading off 2 points. The tech-heavy Nasdaq was bucking the overall market weakness and trading up by 3 points. The recent action in the markets has frustrated anyone who has missed the move or anyone who's been shorting stocks. The constant talk around the markets has been that we're due for a correction or big pullback, but that just hasn't materialized yet.

>>5 Bigt Stocks to Trade for March Gains

The market rarely does what most people expect it to do. Instead, the market has continued to power higher, and many stocks have followed through with strength trigging big breakouts and hitting new 52-week highs.

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.

With that in mind, here's a look at several stocks that are setting up to break out and potentially trade higher from current levels.

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