5 Stocks Setting Up to Break Out

WINDERMERE, Fla. (Stockpickr) -- The markets are prepared to close a harsh week on a high note, as traders look forward to the debut of the much-anticipated Facebook (FB) IPO. A positive showing for Facebook shares could spark a change in the recent downtrend in the U.S. equity markets.

The S&P 500 is on a five-day losing streak, having dropped 3.9% over that timeframe. That popular index is now trading near its lowest level since the middle of January. The Dow Jones Industrial Average is also trading near its late January lows, after this broad index has dropped close to 1,000 points during just the month of May. The tech-heavy Nasdaq is now trading near lows last seen in late January, after it has dropped over 200 points in May.

If the Facebook IPO is a success today, then we could see money start to flow back into the tech sector and other areas of the market. That could spark new breakouts among many stocks on Wall Street, and more important, it could reverse the current bearish trend. Of course, on the flipside, if the Facebook IPO has a bad showing, then the market could just continue on with its recent downtrend and head much lower.

>>8 Stocks Set to Soar off Facebook's IPO

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 five stocks that are setting up to break out and trade higher from current levels.

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