This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Stocks Setting Up to Break Out

Amazon.com

One name in the online retailer complex that looks ready to trigger a near-term breakout trade is Amazon.com (AMZN). 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 Amazon.com, 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 Amazon.com 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.

4 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,563.30 -317.06 -1.88%
S&P 500 1,930.67 -39.40 -2.00%
NASDAQ 4,369.7730 -93.1290 -2.09%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs