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TheStreet Open House

5 Stocks Ready to Break Out

SunEdison

Another semiconductor player that's starting to move within range of triggering a near-term breakout trade is SunEdison ( SUNE), which provides technology solutions to corporations, utilities, governments and chip manufacturers to transform lives around the world. This stock has been red hot so far in 2013, with shares up big by 150%.

>>4 Tech Stocks Under $10 Triggering Breakouts

If you look at the chart for SunEdison, you'll notice that this stock recently formed a double bottom chart pattern at $7.08 to $7.13 a share. Following that bottom, shares of SUNE have started to spike higher and move within range of its 50-day moving average at $8.30 a share and close to triggering a near-term breakout trade.

Traders should now look for long-biased trades in SUNE if it manages to break out above its 50-day at $8.30 a share and then once it takes out more key resistance levels at $8.35 to $8.41 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 5.81 million shares. If that breakout triggers soon, then SUNE will set up to re-fill some of its previous gap down zone from August that started at $10 a share. If this stock gets into that gap with volume, then this stock could easily re-test or take out its 52-week high at $10.47 a share.

Traders can look to buy SUNE off any weakness to anticipate that breakout and simply use a stop that sits right below those double bottom support levels at $7.13 to $7.08 a share. One can also buy SUNE off strength once it takes out that breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

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