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TheStreet Open House

5 Stocks Setting Up to Break Out

NetQin Mobile

Another name in the computer services complex that's close to triggering a breakout trade is NetQin Mobile (NQ), a software-as-a-service provider of consumer-centric mobile Internet services focusing on security and productivity. This is one of the top-performing stocks so far in 2012, with shares up 109%.

If you look at the chart for NetQin Mobile, you'll notice that this stock has been uptrending ridiculously strong for the past few months change, from a low of $4.56 to a recent high of $12.19 a share. During that monster move higher, this stock has consistently made higher lows and higher highs, which is bullish technical price action. That move has now pushed NQ within range of triggering a major near-term breakout trade.

>>10 Best-Performing S&P 500 Stocks of 2012

Market players should consider long-biased traders in NQ if this stock can manage to take out some near-term overhead resistance at $11.39 to $12.19 a share with volume. Look for volume on a move or close above those levels that registers near or well above its three-month average volume of 430,160 shares. On Thursday, this stock closed up 12.2% to $11.06 on volume of 620,811 shares. The stock also hit a high yesterday of $11.14 a share, so it closed very close to its daily high which is bullish technical price action. Whenever a stock closes near its daily highs, the probably of continued momentum increases especially if the volume was strong.

If that breakout does indeed trigger soon for NQ, then it will be a major technical move since the stock will be trading at brand new all-time highs. This company came public back in March of 2011, so basically a move over $12.19 will mean that anyone who has ever bought this stock is making money. That's great company to be in when you own a stock, so look for significant upside if we get that high-volume breakout soon.

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