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5 Breakout Stocks to Trade for Gains

Amazon.com

First up this week is Amazon.com (AMZN - Get Report), a Nasdaq stock that's been trailing its high-flying index year-to-date. Even though Amazon has made leaps and bounds in the last few weeks, it has still only earned investors 14% on the year, vs. that 18.7% that the Nasdaq Composite turned out.

Still, the technicals point to more upside for shareholders of this $90 billion e-tailer in April.

Amazon is coming off the heels of a double-bottom pattern right now, formed by a bottom right at the turn of the year, then another at the start of March. Those two bottoms are a bullish sign for investors right now; they indicate upside in shares. Amazon actually broke out late last month (a buy signal), only to come back down to its breakout level in the last few trading days.

While that price action looks ominous, it's actually a good thing.

The return to Amazon's breakout level is called a throwback -- it's a phenomenon that occurs when a stock breaks out only to return and test newfound support at their throwback level. Throwbacks are actually a positive because they give traders a chance to reaffirm support (at $198 for Amazon), and they give latecomers a second chance at a low-risk entry in shares.

I'd recommend buying AMZN on a bounce off of the $198 breakout level.

I also featured Amazon, which shows up on a list of JPMorgan's 24 Stocks That Are More Attractive Than Apple, recently in " 5 Breakout Trades to Take From Twitter."

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SYM TRADE IT LAST %CHG
AIG $58.61 -1.41%
AMZN $429.23 0.62%
DX $7.77 0.26%
ESRX $87.14 -2.34%
AAPL $130.28 -1.14%

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DOW 18,010.68 -115.44 -0.64%
S&P 500 2,107.39 -13.40 -0.63%
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