3 Tech Stocks That Are Breaking Out Now

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Friday's surge in the Nasdaq to record heights officially marks the end of the correction. At least for tech stocks.

Some work remains before the S&P 50 0 and Russell 2000 will reclaim all that was lost during February's scare. With the tech-heavy index now fully recovered, cautious investors that are unwilling to put capital to work while bears were roaming are now wading back in.

While leading tech stocks have already ramped to new highs, others have breakouts that are just now being teed up. The beauty of these resistance breaching setups is they offer easy entry points, and solid potential for upside follow through. Better yet, today's selections also boast key price thresholds to use for stop losses in case the market sours.

Here are three tech stock breakouts beckoning to profit seekers.

Tech Stocks Breaking Out: Apple Inc (AAPL)

We begin, appropriately so, with the current king of all stocks in the land, Apple Inc. (NASDAQ: AAPL ). The creator of all "i-things" entered the week with a classic cup-and-handle pattern. Its "v"-shaped recovery formed the cup and the past two weeks of churn built the handle. All that remains now is a pop above $180 to complete and confirm this continuation formation.

Source: OptionsAnalytix

Implied volatility for AAPL stock options has officially returned to the basement, making option buys a cheap proposition. To bank on a run to $190, buy the May $180/$190 bull call spread for $4.50. The risk is limited to your initial investment, and the reward is $5.50.

Tech Stocks Breaking Out: Microsoft Corporation (MSFT)

The chart of Microsoft Corporation (NASDAQ: MSFT ) is distinctly similar to its predecessors. Like AAPL, MSFT shares have formed a cup-and-handle pattern that officially broke out on Friday. It's worth noting, MSFT held up much better than AAPL during the February swoon. Its 50-day and 20-day both remained pointing higher during the dramatic episode.

Source: OptionsAnalytix

With the magical century mark beckoning, I see little reason why MSFT can't rise to the coveted land of triple digits over the coming months. To capitalize, buy the May $95/$100 bull call spread for $2.45. The risk is limited to the $2.45 cost, and the reward is $2.55.

Tech Stocks Breaking Out: Facebook Inc (FB)

Our final pick is the laggard of the group, Facebook Inc (NASDAQ: FB ). The action in FB stock has been more subdued than its peers. Months ago, the stock entered a trading range, and it's yet to depart. But with the tech sector en fuego and earnings looming weeks down the road, I think we could see some rotation into the stock.

Source: OptionsAnalytix

Right now, the key level to watch is $186. It has provided resistance for the past six weeks and it is a clean level to trade against. If FB can muster the strength to pop above it, I think a run towards the highs of $195 could be in the cards.

If the breakout occurs, then buy the May $185/$195 bull call spread for around $4.40. The risk will be limited to your cost, and the reward will be $10 minus the cost.

As of this writing, Tyler Craig didn't hold positions on any of the aforementioned securities. Want more education on how to trade? Check out his trading blog,Tales of a Technician.

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The post 3 Tech Stocks That Are Breaking Out Now appeared first on InvestorPlace .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks
Referenced Symbols: AAPL , MSFT , FB

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