My final breakout trading prospect is
), 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%.
>>Timing the Fed's Taper
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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