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5 Stocks Ready to Break Out

Stocks in this article: SRPTARIACNDOSTXSNWBOCSUN

Coronado Biosciences

A biopharmaceutical player that's starting to trend within range of triggering a major breakout trade is Coronado Biosciences (CNDO), which focuses on the development of immunotherapy biologic agents for the treatment of autoimmune diseases and cancer. This stock has been in play with the bulls over the last three months, with shares up sharply by 52%.

>>4 Under-$10 Health Care Stocks Moving Higher

If you take a look at the chart for Coronado Biosciences, you'll notice that this has been trending sideways and consolidating over the last few weeks, with shares moving between $2.52 on the downside and $2.88 on the upside. Shares of CNDO have started to flirt with the upper-end of its recent range today, after the stock tagged an intraday high of $2.91 a share with decent upside volume flows. That move is starting to push shares of CNDO into near-term breakout territory, and it's also moving the stock within range of triggering a much bigger breakout trade.

Traders should now look for long-biased trades in CNDO if it manages to break out above some key near-term overhead resistance levels at $3 to $3.15 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 1.82 million shares. If that breakout triggers soon, then CNDO will set up to re-fill some of its previous gap-down-day zone from last October that started near $7 a share. Some possible upside targets if CNDO gets into that gap with volume are $4 to $5 a share.

Traders can look to buy CNDO off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $2.65 to $2.52 a share, or near $2 a share One could also buy CNDO off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

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