5 Stocks Poised for Breakouts: Trulia and More

 DELAFIELD, Wis. (Stockpickr) -- Trading stocks that trigger major breakouts can lead to massive profits. Once a stock trends to a new high or takes out a prior overhead resistance point, then it's free to find new buyers and momentum players who can ultimately push the stock significantly higher.

Breakout candidates are something that I tweet about on a daily basis. I frequently tweet out high-probability setups, breakout plays and stocks that are acting technically bullish. These are the stocks that often go on to make monster moves to the upside. What's great about breakout trading is that you focus on trend, price and volume. You don't have to concern yourself with anything else. The charts do all the talking.

Trading breakouts is not a new game on Wall Street. This strategy has been mastered by legendary traders such as William O'Neal, Stan Weinstein and Nicolas Darvas. These pros know that once a stock starts to break out above past resistance levels and hold above those breakout prices, then it can easily trend significantly higher.

With that in mind, here's a look at five stocks that are setting up to break out and trade higher from current levels.

Interface


One textile player that's quickly moving within range of triggering a big breakout trade is Interface (TILE) , which designs, produces and sells modular carpet products for the commercial, institutional and residential markets primarily in the Americas, Europe and the Asia-Pacific. This stock has been slammed lower by the sellers in 2014, with shares off sharply by 28%.

If you take a look at the chart for Interface, you'll see that this stock ripped sharply higher on Thursday back above its 50-day moving average of $15.40 a share with strong upside volume flows. Volume on Thursday registered over 970,000 shares, which is well above its three-month average action of 427,000 shares. This sharp spike above a key moving average is now quickly pushing shares of TILE within range of triggering a big breakout trade above a key downtrend line.

Traders should now look for long-biased trades in TILE if it manages to break out above some near-term overhead resistance levels at $16.08 to $16.50 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 action of 427,195 shares. If that breakout triggers soon, then TILE will set up to re-test or possibly take out its next major overhead resistance levels at $17.16 to its 200-day moving average of $17.38 a share. Any high-volume move above those levels and then above $17.67 will give TILE a chance to tag its next major overhead resistance levels at around $19 to $20 a share.

Traders can look to buy TILE off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $14.50 to $14 a share. One can also buy TILE off strength once it starts to take out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Marchex


A marketing services player that's starting to move within range of triggering a major breakout trade is Marchex (MCHX) , which operates as a mobile and call advertising technology company in the U.S. and Canada. This stock has been destroyed by the sellers over the last six months, with shares down large by 62%.

If you take a glance at the chart for Marchex, you'll notice that this stock has been uptrending over the last month, with shares moving higher from its low of $3.44 a share to its recent high of $4.13 a share. During that uptrend, shares of MCHX have been making mostly higher lows and higher highs, which is bullish technical price action. That uptrend has also started to push shares of MCHX back above its 50-day moving average of $3.78 a share. Shares of MCHX are now quickly moving within range of triggering a major breakout trade above some key overhead resistance levels.

Traders should now look for long-biased trades in MCHX if it manages to break out above some key overhead resistance levels at $4.13 to $4.27 a share and then above $4.36 to $4.50 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 661,798 shares. If that breakout begins soon, then MCHX will set up to re-fill some of its previous gap-down-day zone from September that started near $8 a share.

Traders can look to buy MCHX off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $3.52 to $3.44 a share, or around its 52-week low of $3.15 a share. One could also buy MCHX off strength once it starts to clear those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

Trulia


An Internet services player that's starting to trend within range of triggering a near-term breakout trade is Trulia (TRLA) , which provides tools to research homes and neighborhoods for consumers through Web and mobile applications. This stock has been on fire in 2014, with shares up sharply by 42%.

If you take a glance at the chart for Trulia, you'll notice that this stock has been trending sideways and consolidating for the last month or so, with shares moving between $47.29 on the downside and $54.05 a share on the upside. This sideways price action has been taking place right above both TRLA's 50-day and 200-day moving averages. Shares of TRLA are now starting to spike higher right above the lower-end of its range and it's quickly approaching a near-term breakout trade above the upper-end.

Traders should now look for long-biased trades in TRLA if it manages to break out above some key near-term overhead resistance levels at $52.18 to $54.05 a share with high volume. Watch for a sustained move or close above those levels with volume that hits near or above its three-month average action of 689,636 shares. If that breakout develops soon, then TRLA will set up to re-test or possibly take out its next major overhead resistance levels at $57.30 to $62.50 a share.

Traders can look to buy TRLA off weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support levels at $47.29 a share to its 50-day moving average of $46.94 a share. One can also buy TRLA off strength once it starts to move above those breakout levels share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

MobileIron


Another technology player that's starting to move within range of triggering a near-term breakout trade is MobileIron (MOBL) , which develops and provides an information technology platform for enterprises to secure and manage mobile applications, content and devices. This stock has been under selling pressure in 2014, with shares off notably by 18.5%.

If you take a glance at the chart for MobileIron, you'll see that this stock has been downtrending badly for the last three months and change, with shares moving lower from its high of $12.96 to its recent low of $8.33 a share. During that downtrend, shares of MOBL have been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of MOBL have now started to bounce higher right above some previous support levels from August at around $8.30 a share. That bounce is starting to push shares of MOBL within range of triggering a near-term breakout trade.

Traders should now look for long-biased trades in MOBL if it manages to break out above some near-term overhead resistance levels at $9.39 a share to its 50-day moving average of $9.51 a share and then above $10 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 409,483 shares. If that breakout gets started soon, then MOBL will set up to re-test or possibly take out its next major overhead resistance levels at $10.50 to $11.50 a share, or even $12 a share.

Traders can look to buy MOBL off weakness to anticipate that breakout and simply use a stop that sits right below some major support levels at around $8.30 to $8.20 a share. One can also buy MOBL off strength once it starts to bust above those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.

OncoGenex Pharmaceuticals

My final breakout trading prospect is biopharmaceutical player OncoGenex Pharmaceuticals (OGXI) , which develops and commercializes therapies that address treatment resistance in cancer patients. This stock has been absolutely destroyed by the sellers in 2014, with shares down huge by 71%.

If you look at the chart for OncoGenex Pharmaceuticals, you'll notice that this stock recently formed a major bottoming chart pattern, with shares finding buying interest at around $2.08 to $2.05 a share. Those levels were tested multiple times over the last two months, and so far those levels have held. Shares of OGXI have now started to spike higher off those major support levels and it has pushed back above its 50-day moving average of $2.22 a share. That spike is quickly pushing shares of OGXI within range of triggering a big breakout trade above some key near-term overhead resistance levels.

Traders should now look for long-biased trades in OGXI if it manages to break out above some key near-term overhead resistance levels at $2.40 to $2.52 a share and then above $2.67 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 155,569 shares. If that breakout materializes soon, then OGXI will set up to re-test or possibly take out its next major overhead resistance levels at $3 to $3.20, or even $3.40 to $3.50 a share.

Traders can look to buy OGXI off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $2.10 to its 52-week low of $2.05 a share. One can also buy OGXI off strength once it starts to clear those breakout levels with volume and then simply use a stop that sits a conformable percentage from your entry point.

-- 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.

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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