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5 Stocks Poised for Breakouts

Stocks in this article: SRPTNFLXCPRXGMCRSNSSGTIV

Catalyst Pharmaceuticals Partners

Another stock in the biotechnology and drugs complex that's uptrending strong and nearing a major breakout trade is Catalyst Pharmaceuticals Partners (CPRX), which is focused on the development and commercialization of prescription drugs targeting addiction and diseases of the central nervous system. This stock is off to a decent start in 2012, with shares up over 10% so far.

If you look at the chart for Catalyst Pharmaceuticals Partners, you'll notice that this stock has been uptrending very strong since it formed a perfect double bottom chart pattern back in June at 50 cents a share. After bottom at 50 cents, this stock exploded higher to its recent high of $1.64 a share. During that monster run, shares of CPRX have been making higher lows and higher highs, which is bullish technical price action. This stock has experienced a few pullbacks during the last month, and off each of those moves it has made higher lows. Now shares of CPRX are trending within range of triggering a major breakout trade.

>>3 Stocks Under $10 Making Big Moves

Traders should now look for long-biased trades in CPRX if it can manage to trigger a near-term breakout trade above some key overhead resistance levels at $1.50 to $1.64 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 539,561 shares. If we get that action soon, then CPRX will have a great chance of trading well north of $2 a share. It's even possible that CPRX could hit $3 a share off a high-volume breakout.

One could look to buy this stock off any weakness and simply anticipate that breakout. If you get long off weakness, then simply use a stop at around $1.34 a share or down to $1.20 a share as a last resort support zone. You could also get long off strength once $1.50 is cleared and then simply use a stop just below $1.34 to $1.25 a share.

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