5 Names Ready to Break Higher

03/07/2011 10:22 am EST

Focus: STOCKS

Deron Wagner

Founder and Head Portfolio Manager, Morpheus Trading Group

Bullish technical patterns make these two ETFs and three stocks well worth watching in upcoming sessions. Here are the key levels and profit targets for each.

By Deron Wagner

The Market Vectors Coal ETF (KOL) just broke out of a tight, four-week consolidation pattern and appears poised to go higher. KOL could offer a buying opportunity on a pullback to the $47.50-$48.00 area or if it consolidates at the current level for several days. We are monitoring KOL for a possible long entry:

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The JPMorgan Alerian MLP Index ETN (AMJ) has been consolidating for almost three weeks in a tight range. A potential buying opportunity exists with a move back above the most recent high of $38.22 and/or the three-day high of $38.34. One strategy would be to purchase a partial position above the March 3 high and add to the position should AMJ rally above the March 1 high.

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The recent pick up in volatility, along with choppy price action in the markets, presents a challenging environment for swing traders. Since there has been a clear lack of follow through to either side of the market, any swing trades taken should be sold into strength for quick gains. Nevertheless, here are a few bullish set-ups we are monitoring for potential entry points this week:

Basic Energy Services, Inc. (BAS) is a potential breakout entry above the range highs. We like the tight formation holding above the 20-day moving average:

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Chipotle Mexican Grill, Inc. (CMG) is a potential buy entry above the hammer candle reversal bar high of made on March 2. The action is volatile as of late, so take profits as it reaches toward $255.

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Patriot Coal Corp. (PCX) should follow through to the upside after the big reversal bar action on March 2. A close back above the 50-day moving average near $23.64 would be a sell signal.

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By Deron Wagner of Morpheus Trading Group

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