Traders can look to buy ZIP off any weakness as long as it's trending within range of its 50-day moving average of $7.26 a share. One can also buy off strength once ZIP takes out $8.64 to $8.69 a share and then simply use a stop close to $8 to $7.84 a share.
Keep in mind that this is a heavily-shorted stock, since the current short interest as a percentage of the float for ZIP is 23.9%. The bears have also been increasing their bets from the last reporting period by 5.6%, or by around 330,000 shares. If that breakout hits soon, then ZIP could easily see a monster short-squeeze as the bears rush to cover some of their short positions.
My final idea that's trending very close to a near-term breakout trade is
(ARIA - Get Report)
, which is engaged in the discovery and development of breakthrough medicines to treat cancers by regulating cell signaling with small molecules. This stock has been on an absolute tear so far in 2012, with shares up a whopping 79%.
If you look at the chart for Ariad Pharmaceuticals, you'll notice that this stock formed a double top back in October at $25.39 to $25.40 a share. After hitting selling resistance at those levels, shares of ARIA dropped sharply to its recent low of $19.30 a share. Despite that drop, shares of ARIA never violated its 200-day moving average at $18.60 a share and the stock has rebounded back to right below its 50-day moving average of $22.71 a share. That move has now pushed ARIA within range of triggering a near-term breakout trade.
Traders should now look for long-biased trades in ARIA once it manages to take out some near-term overhead resistance levels at $22.03 to $22.41 a share, and then once it takes out its 50-day at $22.71 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 volume of 2,116,890 shares. If that breakout triggers soon, then ARIA will set up to re-test or possibly take out its next major overhead resistance levels at $25 to $25.40 a share.