Another stock that's trading within range of triggering a near-term breakout trade is Skullcandy ( SKUL), which develops and distributes headphones and other audio accessories to retailers throughout the U.S. and to distributors in various countries worldwide. This stock is off to a strong start in 2012, with shares up over 25% so far.

If you take a look at the chart for Skullcandy, you'll see that this stock has been uptrending very strong for the past three months, with shares trending higher from $11.92 to its current price of around $15.80 a share. During that uptrend, shares of SKUL have been consistently making higher lows and higher highs, which is bullish technical price action. Also in just the past couple of weeks, the upside volume for SKUL has started to expand dramatically above its three-month average volume. That recent uptrend has now pushed SKUL within range of triggering a breakout trade.

Traders should now look for long-biased traders in SKUL if this stock can manage to trigger a breakout trade above some key overhead resistance levels at $16.10 to $16.80 a share, and then above $17.76 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average volume of 479,467 shares. If SKUL manages to clear all of those levels soon, then this stock could be setting up to explode higher and take out its next major overhead resistance level at $19.75 a share.

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One can look to buy SKUL off any weakness to anticipate that breakout, and simply use a stop near its 200-day moving average of $14.52 a share. Or one could just buy off strength and get long once SKUL clears $16.10 to $16.80 a share, and then add over $17.76 a share, with a stop just below today's low of $15.41 a share.

This stock has explosive upside potential because once again it's another name the short-sellers are heavily involved in. The current short interest as a percentage of the float for SKUL is extremely high at 71.9%. That's a massive amount of bears in a stock that has only 15.07 million shares available for trading. If SKUL continues to uptrend, then the shorts are going to be pressured more than ever to cover their positions and cut their losses.

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