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Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Breakout Trades to Profit From the 'January Effect'

The buy signal comes on a breakout above the stock's neckline, which comes in at $62. Some traders are anxious about trading a popular pattern like the inverse head and shoulders -- but they shouldn't be.

A recent academic study conducted by the Federal Reserve Board of New York found that the results of 10,000 computer-simulated head-and-shoulders trades resulted in "profits [that] would have been both statistically and economically significant."

That's a good reason to pay attention to CLH this month.

To see this week's trades in action, check out this week's Must-See Charts portfolio on Stockpickr.

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At the time of publication, author had no positions in stocks mentioned.

Jonas Elmerraji, CMT, is a senior market analyst at Agora Financial in Baltimore and a contributor to TheStreet. Before that, he managed a portfolio of stocks for an investment advisory returned 15% in 2008. He has been featured in Forbes , Investor's Business Daily, and on CNBC.com. Jonas holds a degree in financial economics from UMBC and the Chartered Market Technician designation.

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