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5 Stocks Setting Up to Break Out

One name in the online retailer complex that looks ready to trigger a near-term breakout trade is (AMZN - Get Report). This company serves consumers through its retail Web sites and focuses on selection, price and convenience. This stock is off to a decent start in 2012 with shares up around 26%.

If you look at the chart for, you'll see that this stock gapped up big in May from around $195 to over $225 a share on massive upside volume. Follow that major gap up, shares of have trended lower and recently hit a low of $206.37 a share. After hitting that low, the stock found buying interest right below its 50-day moving average of $209.26 a share, and has since then run up to its current price of near $218 a share. That move has now pushed this stock within range of a near-term breakout trade. That trade will hit once AMZN takes out some near-term overhead resistance with high-volume.

Market players should now look for long-biased trades if AMZN can manage to take out some near-term overhead resistance at $221.49 a share with high-volume. Look for a sustained move or close above those levels with volume that's near or above its three-month average action of 4,850,840 shares. If we get that action soon, then AMZN could easily trend higher towards $226 to over $230 a share very quickly.

I would look to buy AMZN off strength once it takes out $221.49 a share with high-volume. Simply use a stop a few percentage points below that level if the breakout triggers soon. I don't want to buy AMZN off weakness for this play since the stock could easily drop back towards its 50-day if it's not ready to break out soon. There is some near-term support at $215 that could be used as a reference point if the stock pulls back before triggering that break out.
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ZUMZ $16.30 0.18%
AAPL $111.31 0.48%
AMZN $537.48 -1.14%
PSUN $0.33 -5.66%
VTUS $16.49 -1.02%


Chart of I:DJI
DOW 16,790.19 +13.76 0.08%
S&P 500 1,979.92 -7.13 -0.36%
NASDAQ 4,748.3610 -32.9030 -0.69%

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