My final breakout trading prospect is Popular ( BPOP), a publicly owned bank holding company that offers retail and commercial banking services through its main banking subsidiary, Banco Popular de Puerto Rico. This stock is off to a strong start so far in 2013, with shares up sharply by 37%.
If you look at the chart for Popular, you'll notice that this stock has been uptrending strong for the last two months, with shares moving higher from its low of $23.97 to its recent high of $29.05 a share. During that uptrend, shares of BPOP have been consistently making higher lows and higher highs, which is bullish technical price action. This stock recently pulled back to its 50-day moving average and subsequently bounced higher. Shares of BPOP are now quickly moving within range of triggering a near-term breakout trade.Traders should now look for long-biased trades in BPOP if it manages to break out above some near-term overhead resistance levels at $29.05 a share to its 200-day moving average at $29.08 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 1.27 million shares. If that breakout triggers soon, then BPOP will set up to re-test or possibly take out its next major overhead resistance levels at $32 to its 52-week high at $34.34 a share. Any high-volume move above $34.34 will then give BPOP a chance to tag $40 a share. Traders can look to buy BPOP off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day at $26.58 a share. One could also buy BPOP off strength once it starts to clear 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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