This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
TheStreet Open House

5 Stocks Poised for Breakouts

Stocks in this article: OMPI SSYS CKEC TSLA SYN AMRN CERS

Cerus

My final idea that's setting up to trigger a near-term breakout trade is biotechnology and drugs player Cerus (CERS - Get Report), a biomedical products company focused on commercializing the Intercept Blood System to enhance blood safety. This stock is off to a bullish start in 2012 with shares up over 25% so far.

If you look at the chart for Cerus, you'll see that this stock has been stuck in a nasty downtrend for the past four months and change, with shares dropping from a high of $4.53 to a recent low of $3 a share. During that downtrend, shares of CRES have consistently made lower highs and lower lows, which is bearish technical price action. That said, CRES has recently started to reverse that trend and make higher lows and higher highs. That move is pushing CRES within range of triggering a near-term breakout trade.

Traders should now look for long-biased traders in CERS if it can manage to trigger a break out above some near-term overhead resistance at $3.63 to $3.83 a share with high-volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 429,778 shares. If we get that move soon, then CRES will have an excellent chance of re-testing and possibly taking out its next major overhead resistance levels at $4.06 to $4.53 a share.

One could look to buy CERS off weakness and anticipate the breakout with a stop around its 50-day moving average of $3.53 a share. You could also buy off strength once $3.63 to $3.83 a share are taken out with high-volume, and then use the same stop near the 50-day. There's also some near-term support at $3.40 a share you could use for a stop if you buy off weakness or strength.

This is a heavily-shorted stock, since the current short interest as a percentage of the float for CERS is 16.7%. Look for a decent short-squeeze to develop for CERS if that breakout triggers soon.

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

-- Written by Roberto Pedone in Winderemere, Fla.

RELATED LINKS:



Follow Stockpickr on Twitter and become a fan on Facebook.

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.
6 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

Jim Cramer's protégé, 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
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, 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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

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

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
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!

Markets

DOW 17,387.21 -291.49 -1.65%
S&P 500 2,029.55 -27.54 -1.34%
NASDAQ 4,681.4970 -90.2660 -1.89%

Partners Compare Online Brokers

Free Reports

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