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

Skullcandy

One stock that's trading very close to triggering a major breakout trade is Skullcandy (SKUL), which develops and distributes headphones and other audio accessories to retailers throughout the U.S. and to distributors in various countries worldwide. This stock is off to a decent start in 2012, with shares up over 18%.

If you take a look at the chart for Skullcandy, you'll see that this stock pulled back and tagged its 50-day moving average of $13.49 about three times during the last couple of weeks. Each time that SKUL tagged its 50-day, the stock was able to hold that key technical level. Now shares of SKUL have started to move back above its 200-day moving average of $14.54 a share, which is a level the stock has struggled to trend above for the past two months and change. If SKUL can maintain a trend above its 200-day moving average, then the stock will setup to trigger a major near-term breakout trade.

>>8 Stocks Under $10 Skyrocketing Higher

Market players should now look for long-biased traders in SKUL if it can manage to trigger a breakout above some near-term overhead resistance at $15.02 to $15.40 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 472,135 shares. If we get that move soon, then this stock has the chance for a very explosive move that should send it soaring over its next significant overhead resistance levels at $16.80 to $17.76 a share, or possibly even above $19.75 a share.

One could look to buy shares of SKUL as long as this stock is holding a strong volume trend above its 200-day moving average of $14.54 a share. If you get long above the 200-day, then look to add into strength once SKUL clears $15.02 to $15.40 with high volume. I would use a stop either below yesterday's low of $14.05 or right below its 50-day moving average of $13.49 a share.

This stock has a major catalyst on the horizon since SKUL is set to report earnings on August 2 after the market close. The current short interest as a percentage of the float for SKUL is gigantic at over 70%. This massive short interest is the perfect storm for a monster short-squeeze in SKUL right into its earnings report, and possible after if the company can deliver strong numbers. This is also a stock with a ridiculously low float of just 15.08 million shares. That low float combined with the huge short interest could easily set off an explosive move if the bulls decide to get long ahead of earnings.

2 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 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7890 -13.6380 -0.30%

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