Acacia Research

Another stock that's starting to move within range of triggering a near-term breakout trade is Acacia Research ( ACTG), which through its operating subsidiaries acquires, develops, licenses and enforces patented technologies. This stock is off to a slow start in 2013, with shares down by 6.4%.

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If you look at the chart for Acacia Research, you'll notice that this stock has been trending sideways for the last two months, with shares moving between $22.84 on the downside and $25.48 on the upside. Shares of ACTG are now starting to push higher and move within range of both its 50-day and 200-day moving averages. That move is quickly setting up ACTG to potentially trigger a near-term breakout trade above the upper end of its recent sideways chart pattern.

Market players should now look for long-biased trades in ACTG if it manages to break out above both its 50-day at $24.57 and its 200-day at $25.69 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 702,953 shares. If that breakout hits soon, then ACTG will set up to re-test or possibly take out its next major overhead resistance level at $27 a share. Any high-volume move above $27 will then give ACTG a chance to re-fill its previous gap down zone from April that started near $30 a share.

Traders can look to buy ACTG off any weakness to anticipate that breakout and simply use a stop that sits right below some near-term support levels at $23.33 or $22.84 a share. One can also buy ACTG off strength once it clears those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

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