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

Spectrum Pharmaceuticals

Another stock that's trading close to triggering a near-term breakout is Spectrum Pharmaceuticals (SPPI), a biotechnology company with integrated commercial and drug development operations with a focus in hematology and oncology. This stock has been trending lower so far in 2012, with shares off by over 16%.

If you look at the chart for Spectrum Pharmaceuticals, you'll see that the bears have destroyed this stock during the last two months following a double top chart pattern at around $17.48 to $17.19 a share. Shares of SPPI went on to plunge off that double top and recently hit a low of $11.13 a share. During that sharp move lower, shares of SPPI were consistently making lower highs and lower lows, which is bearish technical price action. That said, the stock has started to stabilize and trend sideways between $11.33 and $12.76 a share.

Traders should now look for long-biased trades in SPPI if it can manage to break out above some near-term overhead resistance at $12.75 to $12.76 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 1.9 million shares. If that breakout triggers soon, then SPPI will have a great chance of re-testing or possibly taking out its next major overhead resistance levels at $14 to $14.50 a share. If SPPI can take out $14 to $14.50 a share, then it could easily trade north of $15 a share.

One could look to buy SPPI off weakness and simply use a stop that sits just below some near-term support at $11.79 to $11.33 a share. You could also buy off strength once SPPI takes out $12.75 to $12.76 with volume, and then simply use a stop at around $11.80 a share. I would look to add to either position once SPPI clears $14 to $14.50 with heavy upside volume.

5 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 17,071.22 -41.93 -0.24%
S&P 500 1,977.80 -5.05 -0.25%
NASDAQ 4,505.8520 -6.3420 -0.14%

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