4 Breakout Buys for January -- and One Sell
BALTIMORE ( Stockpickr) -- Now that the fiscal cliff is behind us, are you ready to do it all again?
The debt ceiling debate is heating up in Washington, with our elected officials digging in for another protracted battle between Democrats and Republicans. Over on Wall Street, the bulls and bears have been battling as well -- and even if it doesn't fully feel like it just yet, the bulls distinctly have the upper hand right now.
Just last week, the S&P 500 pushed through to a new post 2007 high close, a big move for a market that most investors are still very anxious about. Even though the past few days have come with a correction, it's been more of a sideways move than a downward one. That bodes well for stocks to keep moving higher in 2013.
And it's why we're taking a technical look at five breakout buys for January -- and one lone sell.
For the unfamiliar, technical analysis is a way for investors to quantify qualitative factors, such as investor psychology, based on a stock's price action and trends. Once the domain of cloistered trading teams on Wall Street, technicals can help top traders make consistently profitable trades and can aid fundamental investors in better planning their stock execution.
So without further ado, let's take a look at five technical setups worth trading now.
We'll start big, with $66 billion pharma firm Amgen (AMGN) . Amgen has been a strong performer in the last year, rallying more than 28% over the trailing 12 months. But that rally may be far from over if the price setup in shares holds true.
That's because Amgen is currently forming an ascending triangle pattern, a bullish setup that's formed by horizontal resistance to the upside (at $90, in this case) and uptrending support below shares. As AMGN bounces between those two technical barriers, it's getting squeezed closer and closer to a breakout above resistance. When that breakout above $90 happens, traders have a buy signal for this big pharmaceutical stock.
It's important not to be early on this Amgen trade. Shares have reversed off of $90 resistance the last three times they attempted to move through it. It'll take a close above that $90 level to indicate that the Amgen trade is on. Intralinks Holdings
Moving down the size spectrum, small-cap software firm Intralinks Holdings (IL) is forming the exact same setup as Amgen right now. Like the big pharma firm, IL sports a horizontal resistance level to the upside (at $6.75 for IL) and uptrending support below shares. That push though $6.75 is the buyable move in this stock.