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5 Stocks Setting Up to Break Out


Another stock that's just starting to enter breakout territory is TripAdvisor (TRIP - Get Report), an online travel research company, enabling users to plan and have a trip. This stock is off to a strong start in 2012, with shares up over 40%.

If you take a look at the chart for TripAdvisor, you'll notice that this stock has been in a monster uptrend for the past few months, with shares rising from its January low of $24.57 to its current price of around $36 a share. During that up-move, TRIP has been making mostly higher lows and higher highs, which is bullish price action. Now the stock has started to trigger a breakout trade with shares moving above some near-term overhead resistance, and hitting new 52-week highs.

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Market players should now look for long-biased traders in TRIP as long as the stock is trending above some near-term overhead resistance at $36.05 a share with strong upside volume flows. Look for volume on a sustained move and close above $36.05 that hits near or well above its three-month average action of 2.3 million shares. At last check, TRIP has hit a daily high of $36.85, and volume is above 2 million shares traded.

If we can get a strong close on TRIP today above $36.05 and near its daily highs, then this stock should continue its uptrend in the near-term and potentially hit $40 a share or much higher. I would simply avoid TRIP from the long side if it fails to hold above that breakout level of $36.05, or if it moves back below today's low of $35.27 with high volume.

As of the most recently reported quarter, TripAdvisor is one of Jana Partners' holdings.

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BCEI $3.01 -14.00%
DNDN $0.06 -6.02%
HZNP $15.21 -0.65%
TRIP $65.81 1.40%
VVUS $1.51 -4.40%


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