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.
Twitter and become a fan on Facebook. 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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