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5 Stocks Poised for Breakouts

Barnes & Noble

My final idea today for a breakout trade is bookseller Barnes & Noble (BKS - Get Report). This stock is off to a decent start in 2013, with shares up over 13%.

If you look at the chart for Barnes & Noble, you'll notice that this stock has just started to break out above some near-term overhead resistance at $16.90 a share, and it's quickly moving within range of taking out some more key overhead resistance levels. If that breakout triggers, then it would launch shares of BKS above the upper-end of its recent sideways trading pattern from $15.76 on the downside to $17.50 a share on the upside.

Traders should now look for long-biased trades in BKS if it manages to break out above some near-tem overhead resistance levels at $17.24 to $17.50 a share and then once it clears some past resistance at $17.68 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 1.35 million shares. If that breakout triggers soon, then BSX will set up to re-test or possibly take out its next major past resistance levels at $19.58 to $21 a share.

Traders can look to buy BKS off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $15.96 to $15.76 a share. One could also buy BKS off strength once it takes out those breakout levels with volume and then simply use a stop that sits right below $16.50 a share.

This is clearly a hated stock on Wall Street, since the current short interest as a percentage of the float for BKS is crazy large at 38.7%. If that breakout triggers soon, then we might get a monster short-squeeze, so make sure to keep an eye on shares of BKS here.

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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ZNGA $2.38 0.00%
ACUR $3.28 0.00%
BKS $11.75 0.00%
FB $117.58 0.00%
SVA $6.32 0.00%


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