Ruckus Wireless

My final breakout trading idea today is Ruckus Wireless ( RKUS), which provides carrier-class Wi-Fi solutions to service providers and enterprises to solve network capacity and coverage challenges. This stock has been destroyed by the bears so far in 2013, with shares down by 39%.

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If you look at the chart for Ruckus Wireless, you'll notice that this stock has been uptrending strong for the last month, with shares soaring higher from its low of $10.24 to its recent high of $13.74 a share. During that uptrend, shares of RKUS have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of RKUS within range of triggering a major breakout trade.

Traders should now look for long-biased trades in RKUS if it manages to break out above some near-term overhead resistance levels at $13.74 to its gap down day high of $15.40 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 1.27 million shares. If that breakout triggers soon, then RKUS will set up to re-fill some of its previous gap down zone from May that started at $19 a share. Any high-volume move above $19 a share could then take RKUS back above $21 a share.

Traders can look to buy RKUS off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day at $12.86 a share, or just below $12 a share. One could also buy RKUS off strength once it clears 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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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

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