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5 Stocks Ready to Break Out

Caesars Entertainment

My final idea today for a breakout trade is Caesars Entertainment (CZR - Get Report), a casino-entertainment provider and the most geographically diverse U.S. casino-entertainment company. This stock has been exploding higher so far in 2013, with shares up 67%.

If you look at the chart for Caesars Entertainment, you'll notice that this stock recently sold off hard from its recent high of $14.25 a share to right around $10.50 a share. Following that pullback, shares of CZR have started to form consolidation pattern at around $10.60 to $12 a share, and it's now quickly moving within range of breaking about above the recent highs of its consolidation chart pattern.

Traders should now look for long-biased trades in CZR if it manages to break out above some near-term overhead resistance at $12.10 a share with high volume. Look for a sustained move or close above $12.10 share with volume that hits near or above its three-month average action of 838,684 shares. If that breakout triggers soon, then CZR will set up to re-test or possibly take out its next major overhead resistance levels at $13.14 to $14.25 a share. Any high-volume move above $14.25 will then put $15.74 to $17.30 into range for shares of CZR.

Traders can look to buy CZR off any weakness to anticipate that breakout and simply use a stop that sits right below some near-term support at $10.62 a share. One could also buy CZR off strength once it takes out $12.10 a share with volume and then simply use a stop that sits just below today's low of $11.04 a share.

This stock is a favorite target of the short-sellers, since its current short interest as a percentage of its float is extremely high at 19%. If that breakout triggers soon, then CZR could easily setup for a monster short-squeeze, so make sure to put this name on your breakout trading radar.

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

-- Written by Roberto Pedone in Winderemere, Fla.


Follow Stockpickr on 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 and . You can follow Pedone on Twitter at or @zerosum24.
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