5 Stocks Showing Major Breakouts

Anadigics

My final idea that's trending very close to triggering a major breakout trade is Anadigics (ANAD), which is a provider of semiconductor solutions in the growing broadband wireless and wireline communications markets. This stock has been soaring during the last six months, with shares up 126%.

If you look at the chart for Anadigics, you'll notice that this stock has been trading inside of a consolidation pattern for the last month and change, with shares moving between $2.23 on the downside and $2.71 on the upside. Shares of ANAD have now started to find buying interest above $2.46 to $2.50 a share and its quickly moving within range of triggering a major breakout trade above the upper-end of its recent sideways chart pattern.

Traders should now look for long-biased trades in ANAD once it manages to break out some near-term overhead resistance levels at $2.70 to $2.71 a share and the above some past resistance at $2.77 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 604,531 shares. If that breakout triggers soon, then ANAD will set up to re-test or possibly take out its next major overhead resistance levels at $3.22 to $3.44 a share. Any high-volume move above $3.44 will then put $4 into range for shares of ANAD.

One could look to buy ANAD off any weakness to anticipate that breakout and then simply use a stop that sits right below its 50-day moving average of $2.30 a share. Traders can also look to buy ANAD off strength once it takes out those breakout levels with volume and then simply use a stop that sits just below some key near-term support levels at $2.50 to $2.46 a share.

To see more breakout candidates, check out the Breakout Stocks of the Week portfolio on Stockpickr.

-- Written by Roberto Pedone in Winderemere, Fla.

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

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

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