Stock Quotes in this Article: GOOG, PDLI, PZZA, TSLA, YOKU

WINDERMERE, Fla. (Stockpickr) -- U.S. stocks are on the move higher Friday on data showing that domestic companies added more jobs than expected in April, despite the fact that the unemployment rate jumped higher for the first time in five months.

Government data showed that nonfarm payrolls rose by 244,000 last month as the private sector reported the strongest employment gains in five years. The better-than-expected jobs numbers easily exceeded analysts’ expectations for a rise of 185,000.

However, the unemployment rate jumped to 9% last month from 8.8% in March. It marked the first rise in the jobless rate since November, when it was reported at 9.8%. The market clearly cares more about the nonfarm payrolls as traders quickly bid up stock prices across the board.

The Dow Jones Industrial Average is in rally mode, adding over 100 points to the upside trading at over 12,700, and S&P 500 tacked on over 10 points to the upside trading in at 1345. The tech-heavy Nasdaq is up by over 35 points, pushing this index over 2850.

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    The action in the markets is extremely bullish today, with every sector trading to the upside. That said, the market came into Friday in a clear short-term downtrend with massive destruction taking place in some hot commodity-related sectors such as silver and oil. The market now needs to prove itself with some positive closes and better action among market-leading stocks. Some of those leaders, includingSina (SINA), Sohu.com (SOHU), Netflix (NFLX) and MercadoLibre (MELI), are starting to show signs of strength again, so continue to monitor these names for tells on future market direction.

    There are still plenty of stocks that are setting up to breakout and are worth considering for trades. Trading breakouts is not a new game on Wall Street. This strategy has been by legendary traders such as William O’Neal, Stan Weinstein and Nicolas Darvas.

    Here's a look at a number of stocks that look poised to break out and trade significantly higher from current levels.

    Google

    My first breakout candidate is best-of-breed Internet player Google (GOOG), which shows up on a recent list of 10 Tech Stocks With Big Upside. Google, which is focused on improving the ways people connect with information, generates revenue primarily by delivering online advertising. The stock is off to a slow start in 2011, with shares off by around 9%.

    If you take a look at the chart for Google, you’ll see that the stock has started to make higher lows since it put in a near-term bottom at around $520 a share. This bottom was hit after Google sold off hard following its most recent earnings report. What I like about the action in the stock now is that Google is approaching a breakout if it can manage to trade above some near-term overhead resistance at around $546 a share. The stock is only about 6 points away from that level, so this name is worth watching for breakout play if it can take that price out to the upside.

    A move above $546 would move Google into a gap down zone in price that was formed when Google reported earnings. Whenever a stock starts to trade back into a gap down zone it can quickly fill that gap and explode higher, so this one is worth watching here.

    One could buy this once it takes out $546 with heavy volume and simply stop out of the trade a few points below that level if the breakout fails. If Google does break out, then we could easily see this stock fill the gap all the way back towards $580 a share.

    Google, one of TheStreet Ratings' top-rated Internet software and services stocks, was recently highlighted as one of 10 stocks analysts are bullish about.

    Yoku.com

    One market leader that looks ready to break out is red-hot China Internet player Yoku.com (YOKU). Yoku.com's Internet television platform enables consumers to search, view and share video content quickly and easily across multiple devices. This stock has been blazing a trail in 2011, with shares up a whopping 71%.

    If you take a look at the chart for Yoku.com, you’ll see that the stock is just starting to break out above a key descending trend line. This breakout is looking strong, with the stock moving up over 4% so far in today’s trading session. Volume is also tracking in strong so far, with over 2.7 million shares traded which is above the three-month average trading volume of 2.2 million shares. Watch for this stock to close above that descending trend line today for confirmation that higher prices could be in the cards.

    One could be a buyer right now with a stop below Friday’s low, or you could even use a tighter depending on your position size and risk tolerance. The reason a move above a descending trend line can be very bullish is because when a stock is weak it usually will fail at the line versus breaking above it. If Yoku.com is going to start a new uptrend and you get in, I would add to my position in a big way if it takes out its all-time high of $70 with big volume.

    Keep in mind that this is heavily shorted stock, with over half of the tradable float currently sold short by the bears. The total float is 15.42 million, and the amount of shares that are sold short stands at around 8.8o million. This stock could explode higher if this breakout holds.

    Tesla Motors

    Another stock that looks poised to break out is Tesla Motors (TSLA), which designs, develops, manufactures and sells fully electric vehicles and electric vehicle powertrain components. This stock is pretty much flat on the year, with shares up by only around 2.33%. That said, things could be gearing up to change quickly for Tesla if the stock can manage to move above some key resistance levels.

    If you take a look at the chart for Tesla, you’ll see that the stock is approaching a major breakout if it can manage to trade above a key descending trend line at around $28 a share. If it takes that level out soon, then watch for Tesla to move above $29 a share for an even bigger breakout. All of these prices I am highlighting are major resistance levels, so a break above the descending trend line and then $29 would be very bullish for this stock.

    It’s also bullish that TSLA has been making higher lows since the end of March. This shows that large institutional traders are paying up for the stock every time it has dipped in price. Now all we need is for those overhead resistance levels to get taken out to the upside and this stock should be off to the races.

    One could buy this stock once it moves above the descending trend line and add to the position above $29 if we see strong upside volume move in that’s well above the three-month average volume of 1.5 million shares. You could stop out of the trade if it fails to breakout or if the stock moves $25 a share.

    It’s worth noting that this stock is heavily shorted, with its current short interest as a percentage of the float at a whopping 33.1%. In fact, I highlighted it recently as one of five earnings stocks that could get squeezed higher. If the bears can’t hold this stock below the approaching resistance levels, then we could easily see a big short squeeze develop.

    PDL BioPharma

    If you’re looking for a breakout play in the biotech space, then check out the action in PDL BioPharma (PDLI), which engages in the management of antibody humanization patents and royalty assets. This stock hasn’t done much in 2011, with shares up around 4.8%, but that could be about to change.

    If you take a look at the chart for PDL BioPharma, you’ll see that the stock has started to trade above some past overhead resistance at around $6.38 a share. This move above that resistance level came after the stock setup and based for an entire month between $6 and $6.40 a share. The only issue here is that strong upside volume isn’t coming into the stock as it breaks out.

    I would monitor this name going forward and watch to see if we start getting some upside volume that clocks in at well above the three-month average volume of 3 million shares. One could be a buyer right here of this stock, or buy it on any pullback towards near-term support at $6 a share. I would get out of the trade if it broke $6 and accelerated volume.

    This is also a heavily shorted stock since the current short interest as a percentage of the float is 10.4% as of April 15. If the breakout is the real deal here, then we could see some short covering start move in as the bears capitulate out of the stock.

    PDL, one of the 20 highest-yielding drug stocks, received a high-profile bullish bet in the most recently reported quarter from Seth Klarman's Baupost Group, which initiated a 5.6 million-share position in the stock.

    Papa John’s International

    Another breakout play is Papa John’s International (PZZA), which operates and franchises pizza delivery and carryout restaurants and, in certain international markets, dine-in and restaurant-based delivery restaurants under the trademark Papa John’s. This stock is off to solid start in 2011, with shares up around 16%.

    If you take a look at the chart for Papa John’s, you’ll see that the stock is starting to break out above some past overhead resistance at around $32.19 a share. What I like about the action in Papa John's is that during the last couple of trading sessions volume has started to pick up dramatically to the upside. The last two trading sessions (up days) coming in to today saw volume of 364,200 and 314,900 shares, respectively, which is well above the three-month average volume of just 119,000 shares.

    I would watch for Papa John's to close above $32.19 in the coming day or weeks on strong volume for confirmation that this stock wants to trade much higher. The all-time high on this stock is just above $36 a share, so we have a lot of upside here, and if it wants to really trend it could be entering a new bullish stage where it easily takes out that all-time price.

    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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    At the time of publication, author had no positions in stocks mentioned.

    Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.