Stock Quotes in this Article: BCRX, LIVE, AMRS, WIFI, BCOV

WINDERMERE, Fla. (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 that can ultimately push the stock significantly higher.


A great example of a powerful breakout that just hit Wall Street today is LiveDeal LIVE. On Thursday, I wrote about the potential for a breakout trade for LiveDeal in my "5 Stocks Under $10 Set to Soar" article. I highlighted how shares of LiveDeal were setting up to trigger a near-term break out above $7.67 a share.

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Guess what happened? Shares of LiveDeal triggered that breakout today, and the stock has exploded over 20%, soaring from a low of $7.24 to its intraday high so far of $9.21 a share. That breakout for LIVE has also triggered with heavy volume, since more than 140,000 shares have traded vs. its three-month average volume of 55,014 shares.


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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 four stocks that are setting up to break out and trade higher from current levels.

Amyris


One chemical manufacturing player that's trading within range of a major breakout trade is Amyris AMRS. This company is building and applying its industrial synthetic biology platform to provide alternatives to petroleum-sourced products used in specialty chemical and transportation fuel markets worldwide. This stock has been hammered by the sellers so far in 2012 with shares off by more than 70%.


If you take a look at the chart for Amyris, you'll see that this stock was downtrending hard from its February high of $10.56 to a recent low of $1.57 a share. During that massive move lower, shares of Amyris have consistently made lower highs and lower lows, which is bearish technical price action.

That said, after hitting that low of $1.57, shares of Amyris have now started to reverse that downtrend and are now making higher lows and higher highs, which is bullish price action. That move has now pushed Amyris within range of triggering a major breakout trade.


Traders should now look for long-biased traders in AMRS if it can manage to trigger a break out above some near-term overhead resistance at $3.49 to $3.53, and then above $3.89 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 675,555 shares. If we get that action soon, then AMRS could make a monster move back toward its next significant overhead resistance levels of $6 to $6.69 a share.


One could be a buyer of AMRS off weakness and anticipate the breakout with a stop at around $3 a share. One could also buy off strength and get long once $3.49 is taken out with high volume. If you buy off strength, then I would use a stop that's a few percentage points below $3.49 a share. I would then add to either position once AMRS takes out $3.89 with strong volume.

Boingo Wireless


Another stock that's trading within range of a big breakout is technology player Boingo Wireless WIFI. This company's solution includes software for Wi-Fi-enabled devices, such as smartphones, laptops and tablet computers, and its back-end system infrastructure that detects and enables one-click access to its global Wi-Fi network. This stock is off to a strong start in 2012, with shares up over 30%.


If you take a look at the chart for Boingo Wireless, you'll notice that this stock recently bounced right off its 200-day moving average of near $9 a share, and then subsequently broke back above its 50-day moving average of around $10.30 a share. That move has now pushed shares of Boingo Wireless within range of triggering a near-term breakout trade. That trade will hit once WIFI takes out some overhead resistance levels that have kept this stock down for the last two months and change.


Market players should now look for long-biased traders in WIFI if it can manage to trigger a near-term breakout above some overhead resistance at $11.50 to $11.62 a share with high volume. Look for a sustained move or close above those levels with volume that hits close to or above its three-month average action of 148,761 shares.

If we get that action soon, then WIFI could easily re-test and possibly take out its March high of $13.25 a share. This breakout would be a powerful one, since WIFI has failed to get above those levels for a few months now.


One could buy WIFI off weakness to anticipate the breakout with a stop that's set just below some near-term support at $10.89, or just below its 50-day moving average of $10.34 a share. A better way to play WIFI is to buy off strength, once it takes out $11.50 to $11.62 a share with heavy volume. I would simply use a stop around $11, if you buy off strength.

Brightcove


One name in the software and programming complex that looks ready to trigger a major breakout trade is Brightcove BCOV. This cloud content-services company is a global provider of cloud-based solutions for publishing and distributing professional digital media. This stock is off to a decent start in 2012, with shares up more than 10%.


If you look at the chart for Brightcove, you'll see that this stock sold off hard from its March high of $25.43 to a recent low of $12.10 a share. During that sharp move lower, shares of Brightcove have mostly made lower highs and lower lows, which is bearish technical price action.

That said, since hitting that low of $12.10, shares of Brightcove have now started to make higher highs and higher lows, which is bullish technical price action. That change in trend has now pushed BCOV within range of trigging a near-term breakout trade.


Market players should now look for long-biased trades if BCOV can manage to take out its 50-day moving average of $15.76, and then trade above some near-term overhead resistance at $16.39 a share with high-volume. Look for a sustained move or close above those levels with volume that's near or above its three-month average action of 184,802 shares. If we get that action soon, then BCOV could easily rip higher, back toward its next significant overhead resistance levels at $20.50 to $22 a share.


One could look to buy BCOV off weakness and simply use a stop around some near-term support at $15.00 to $14.42 a share. You could also buy off strength and get long once BCOV maintains a trend above its 50-day, and then takes out $16.39 with high volume. I would simply use a stop just below the 50-day if you buy off strength to play this potential breakout.

BioCryst Pharmaceuticals


My final stock that's setting up to trigger a near-term breakout trade is biotechnology and drugs player BioCryst Pharmaceuticals BCRX. This company designs, optimizes and develops drugs that block enzymes involved in therapeutic areas of interest to the company. This stock is blazing a trail to the upside so far in 2012, with shares up more than 60%


If you look at the chart for BioCryst Pharmaceuticals, you'll notice this stock was hammered by the bears from its March high of $5.95 to a recent low of $2.89 a share. During that slide lower, shares of BioCryst have consistently made lower highs and lower lows, which is bearish technical price action.

That said, since hitting that low of $2.89, the stock has started to reverse that bearish trend and make higher lows and higher highs. Shares of BioCryst have also started to break out today above some near-term overhead resistance at $3.72 to $3.83 a share with heavy volume. That move is now pushing BCRX within range of trigging another major breakout trade.


Traders should now look for long-biased traders in BCRX, if it can manage to trigger a break out above some near-term overhead resistance at $4.25 a share with high volume. Look for a sustained move or close above $4.25 with volume that hits near or above its three-month average action of 283,736 shares. If we get that move soon, then BCRX could easily trade back toward its next significant overhead resistance levels at $5.51 to $5.95 a share.


One could look to buy BCRX off weakness and anticipate the breakout with a stop at around $3.75 a share. You could also buy BCRX off strength and get long once it clears $4.25 with high volume. I would simply use a stop at around $3.70 to $3.50, if you buy off strength, in case the breakout fails to hold. It's worth pointing out that volume today is already close to 1 million shares traded, with BCRX up over 7% to $4 a share. This action shows that large traders could already be positioning for a larger move higher in BCRX.


To see more breakout candidates, check out the Breakout Stocks of the Week portfolio on Stockpickr.

-- Written by Roberto Pedone in Winderemere, Fla.


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