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5 Stocks Setting Up to Break Out

Bio-Reference Laboratories

One more stock that's trending very close to triggering a major breakout trade is Bio-Reference Laboratories (BRLI - Get Report), which is engaged in providing laboratory testing services, to customers in the greater New York metropolitan area, as well as to customers in other states. This stock is off to a solid start in 2012, with shares 50%.

If you look at the chart for Bio-Reference Laboratories, you'll notice that this stock bottomed recently at around $18.29 a share, which also happened to be right below its 200-day moving average of $19.21 a share. After bottoming at that level, shares of Bio-Reference Laboratories have soared back above its 50-day moving average of $21.60 a share. That move has now pushed BRLI into range of triggering a major breakout trade, since the stock is flirting with new 52-week highs.

Traders should now look for long-biased trades in BRLI as long as it maintains a trend above its key breakout levels at $24.51 to $24.48 a share with high-volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 227,772 shares. If we see BRLI hold that trend, then this stock could easily continue its uptrend towards $30 a share or higher in the near future.

One can buy BRLI off of weakness and simply use a stop around some near-term support at $23 a share. Another way to play BRLI is to buy off strength and get long once it clears $24.48 to $24.51 a share with heavy volume. If you buy off strength, then I would simply use a stop that's a few percentage points below those levels in case that breakout fails to hold.

I also included Bio-Reference recently in " 5 Stocks That Could Pop Post-Earnings."

To see more breakout candidates, check out the Breakout Stocks of the Week portfolio on Stockpickr.

-- Written by Roberto Pedone in Winderemere, Fla.

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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.
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ACHN $7.39 0.00%
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