My final breakout trading prospect is solar energy player China Sunergy (CSUN), which, together with its subsidiaries, engages in the design, development, manufacture and marketing of solar cells and modules in the People's Republic of China and internationally. This stock has been moving higher over the last three months, with shares up by just over 23%.
If you look at the chart for China Sunergy, you'll notice that this stock recently formed a double bottom chart pattern at $5 to $5.05 a share. Following that bottom, shares of CSUN have started to uptrend with the stock moving back above its 50-day moving average. That uptrend has now started to push shares of CSUN within range of triggering a near-term breakout trade.Traders should now look for long-biased trades in CSUN if it manages to break out above some near-term overhead resistance levels at $7.62 to $7.65 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 835,321 shares. If that breakout triggers soon, then CSUN will set up to re-test or possibly take out its next major overhead resistance levels at $8.50 to its 52-week high at $10.19 a share. Traders can look to buy CSUN off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support at $6.12 a share. One can also buy CSUN off strength once it starts to take out 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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