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

Sunesis Pharmaceuticals

One biotechnology and drugs stock that's trading very close to triggering a major breakout trade is Sunesis Pharmaceuticals (SNSS), which is focused on the development and commercialization of oncology therapeutics for the treatment of solid and hematologic cancers. This stock is off to a hot start in 2012, with shares up a whopping 180% so far. I also featured Sunesis recently in " 5 Biotech Stocks Under $10 Blasting Higher."

This company has a catalyst on the horizon; the phase III single interim analysis for its Valor leukemia treatment will be conducted sometime in September. The company has already enrolled 391 patients of the 450 planned for this safety and data study.

If you take a look at the chart for Sunesis Pharmaceuticals, you'll notice that this stock has been uptrending very strong for the last six months, with shares making mostly higher lows and higher highs, which is bullish technical price action. This stock just found buyers right off its 50-day moving average of $2.98 a share, and it's now quickly moving within range of triggering a major breakout trade. The upside volume for SNSS has also been increasing dramatically as it approaches this potential breakout play.

>>22 Biopharma Stocks With Breakout Potential in 2012

Traders should now look for long-biased traders in SNSS once it manages to break out above some near-term overhead resistance levels at $3.27 to $3.38 a share and then above $3.57 to $3.69 a share with high volume. Look for a sustained move or close above all of those levels with volume that hits near or above its three-month average action of 289,147 shares. If that breakout triggers soon, then SNSS should easily head north of $4 a share and possibly tag $5 a share before that catalyst in September.

One could look to buy SNSS off any weakness to anticipate the breakout and simply use a stop that sits just below its 50-day moving average of $2.98 a share. One could also just buy off strength once SNSS clears $3.27 to $3.38 a share with decent volume and then add above the next tier of resistance levels. I would use a stop at around $3.10 if you buy off strength once SNSS clears $3.27 with volume.

Keep in mind that SNSS is a favorite target of the short-sellers. The current short interest as a percentage of the float for SNSS is very high at 11.6%. If that breakout triggers soon, then look for the shorts to help fuel the run higher as the rush to cover some of their bearish bets.

2 of 6

Select the service that is right for you!

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 17,172.68 -107.06 -0.62%
S&P 500 1,994.29 -16.11 -0.80%
NASDAQ 4,527.6890 -52.10 -1.14%

Brokerage Partners

Rates from

  • 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