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5 Stocks Poised for Breakouts


Another tech stock that's setting up to trigger a near-term breakout is technology king Apple (AAPL). This stock is off to a strong start in 2012, with shares up around 50%. (It was also featured earlier today in "5 Stocks Ready to Slingshot Higher."

If you look at the chart for Apple, you'll notice that this stock recently found some buying interest right around its 50-day moving average of $573.95 a share. After buyers stepped in, shares of AAPL started to soar and trigger a near-term breakout trade once it cleared some overhead resistance levels at $588.50 to $590 a share with decent volume. That move is now pushing AAPL within range of triggering another major breakout trade that could lead to a sharp move higher.

>>4 Ways to Profit When Apple Hits $725

Market players should now look for long-biased traders in AAPL if this stock can manage to trigger a break out above some near-term overheard resistance at $618 to $620.25 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 19.1 million shares. If we get that action soon, then AAPL has a great chance of re-testing and possibly taking out its all-time high of $644 a share.

One could look to buy AAPL off weakness and simply anticipate the breakout with a stop just below today's low of $599.65 a share. A better way to play this trade is to simply buy off strength once AAPL takes out $618 to $620.25 with decent volume, and then use a stop just below those key breakout levels. Either way, this stock will be in play if it can manage to hold a trend above those breakout levels with decent volume.

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