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


Another stock that looks poised to trigger a major breakout trade is Internet TV broadcasting player Netflix (NFLX), which provides Internet subscription services for TV shows and movies in the U.S. and internationally. This stock has been smashed by the short-sellers during the last six months, with shares down by a whopping 45%.

If you look at the chart for Netflix, you'll notice that this stock recently ran into heavy resistance at around $85 to $86.50 a share in July. After failing to clear those resistance levels, shares of NFLX plunged and gapped down from over $80 to below $60 a share with monster selling volume. Following that gap down, shares of NFLX went on to make a new low of $52.81 a share. That said, shares of NFLX have now started to rebound sharply with the stock trading at around $63 a share. That rebound has pushed NFLX within range of triggering a major breakout trade.

>>4 Stocks That Could Burn Short-Sellers

Traders should now look for long-biased traders in NFLX if this stock can manage to take out its gap down day high of $66.80 a share from back in July with high volume. Look for a sustained move or close above $66.80 with volume that registers near or above its three-month average action of 4,858,760 shares. If that breakout triggers soon, then look for NFLX to rip higher as it attempts to re-fill some of that previous gap. This stock could easily trend north of $70 a share if that breakout triggers soon.

Since this is simply a breakout trade for a play off a move into that gap, I wouldn't give this very much room to the downside if you buy off weakness. If you get long off weakness, simply use a stop at around Thursday's low of $62.80 a share. I would rather get long off strength once NFLX clears $66.80 with high volume, and then simply use a stop at $65 to $64 a share.

This is another favorite target of the bears on Wall Street. The current short interest as a percentage of the float for NFLX is extremely high at 28.6%. The bears have also been increasing their bets from the last reporting period by 23.6%, or by about 2.94 million shares. Look for some short-covering to hit NFLX if this stock can get into that gap from back in July.

For another take on Netflix, it shows up on a list of 6 Sucker Stocks to Avoid at All Costs.

5 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 17,279.74 +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

  • 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