5 Stocks Setting Up to Break Out
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One more stock that's close to triggering a big breakout is Tesco(TESO) , which is engaged in the designing, manufacturing and service delivery of technology-based solutions for the upstream energy industry. This stock is off to a decent start in 2012, with shares up over 16% so far.
If you look at the chart for Tesco, you'll notice that this stock has been trading range bound for the past month between $13.31 on the downside and $14.87 on the upside. During that timeframe, the upside volume days have easily outpaced the downside volume days, which demonstrates that large traders are accumulating the stock. A high-volume move outside of that recent range should setup TESO for its next major trend.
Traders should now look for long-biased trades in TESO if this stock can manage to break out above some near-term overheard resistance at $14.87, and then above its 200-day moving average of $14.90 with high volume. Look for a sustained high-volume move or close above those level that's near or well above its three-month average action of 180,366 shares. On Thursday, volume registered over 494,000 shares and the stock closed at $14.76 a share.
Traders should consider getting long this stock as long as it's trending above $14.87 and $14.90 with strong upside volume flows. If TESO can sustain a trend above those price points, then this stock has a great chance to make a run at its most recent highs of $16.81 to $17.54 a share. I would no longer look for that move if TESO were to reverse course and move back below its 50-day moving average of $14.39 with high volume.
To see more breakout candidates, check out the Breakout Stocks of the Week portfolio on Stockpickr.
-- Written by Roberto Pedone in Winderemere, Fla.