This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

5 Stocks Poised for Breakouts

Velti

One stock that's trending very close to triggering a near-term breakout trade is Velti (VELT), which is a global provider of mobile marketing and advertising technology and solutions. This stock has been destroyed by the bears during the last six months, with shares off by 74%.

If you take a look at the chart for Velti, you'll notice that this stock has been trending sideways in a consolidation pattern for the last month, with shares moving between $1.80 on the downside and $2.10 on the upside. This consolidation pattern is occurring after shares of VELT gapped down in mid-March from over $3 to around $2 a share. Shares of VELT are now starting to move within range of triggering a near-term breakout trade above the upper-end of its recent sideways chart pattern.

>>5 Stocsk Under $10 Making Big Moves

Traders should now look for long-biased trades in VELT if it manages to break out above some near-term overhead resistance levels at $2.08 to $2.10 a share and then above more resistance at $2.13 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 2.35 million shares. If that breakout triggers soon, then VELT will set up to re-test or possibly take out its gap down day high that sits right around $2.50 a share.

Traders can look to buy VELT off any weakness to anticipate that breakout and simply use a stop that sits just below some key near-term support levels at $1.86 to $1.80 a share. One could also buy VELT off strength once it takes out those breakout levels with volume and then simply use a stop right at around $2 to $1.86 a share. I would add to either position once VELT clears its gap down day high at $2.50 with strong volume.

This stock is a favorite target of the short-sellers, since its current short interest as a percentage of the float is extremely high at 27.9%. If that breakout triggers soon, then I expect to see a monster move higher for VELT as the shorts rush to cover some of those bearish bets.

2 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • 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 Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7890 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs