Barnes & Noble
My final idea today for a breakout trade is bookseller Barnes & Noble (BKS). 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.
Twitter and become a fan on Facebook.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV