My final breakout trading prospect is specialty biopharmaceutical player
), which develops and markets products to urologists, endocrinologists, orthopedists and select primary care physicians and plastic surgeons who focus on the hand, and rheumatologists. This stock is off to a slow start in 2013, with shares up just 8.3% during the last six months.
>>5 Trades to Take for October Gains
If you look at the chart for Auxilium Pharmaceuticals, you'll notice that this stock recently formed a triple bottom chart pattern at $17.36, $17.74 and $17.57 a share. Following that bottom, shares of AUXL have now started to trend back above its 50-day moving average of $18.29 a share. That move is quickly pushing shares of AUXL within range of triggering a near-term breakout trade.
Traders should now look for long-biased trades in AUXL if it manages to break out above some near-term overhead resistance levels at $19 to $19.08 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 834,717 shares. If that breakout triggers soon, then AUXL will set up to re-test or possibly take out its next major overhead resistance level at $20.95 a share. Any high-volume move above that level will then give AUXL a chance to re-test its 52-week high at $25.54 a share.
Traders can look to buy AUXL off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $17.36 to $16.77 a share. One could also buy AUXL off strength once it clears those breakout levels with volume and then simply use a stop that sits a conformable percentage from your entry point.
To see more breakout candidates, check out the
Breakout Stocks of the Week
portfolio on Stockpickr.
-- Written by Roberto Pedone in Delafield, Wis.
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