Pandora

One stock that's trending very close to triggering a major breakout trade is Pandora ( P), which provides Internet radio services in the U.S. This stock has been on fire so far in 2013, with shares up a whopping 54%.

If you take a look at the chart for Pandora, you'll notice that this stock recently formed a double bottom chart pattern at $12.66 to $12.76 a share. Following that bottom, shares of Pandora have bounced strongly right off its 50-day moving average and now the stock is quickly moving within range of taking out some near-term overhead resistance levels. Those resistance levels have acted as a wall for the stock for the last two months, so if they get taken out with volume, shares of Pandora could soar higher.

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Traders should now look for long-biased trades in P if it manages to break out above some near-term overhead resistance levels at $14.03 to $14.32 a share and then once it takes out its 52-week high at $14.70 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 5.24 million shares. If that breakout triggers soon, then P will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $18 to $20 a share -- or even $22 a share.

Traders can look to buy P off any weakness to anticipate that breakout and simply use a stop that sits just below its 50-day moving average at $13.19 a share. One could also buy P off strength once it takes out those breakout levels with volume and then simply use a stop right below $13.50 a share or below its 50-day.

This stock is a favorite target of the short-sellers, since the current short interest as a percentage of the float for Pandora is very high at 22.3%. If that breakout triggers soon, then shares of Pandora could easily experience a monster short-squeeze, so make sure to have this name on your breakout trading radar.

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