Breakouts for Aug 11th: Three breakout candidates for tomorrow, although all three remain vulnerable to sharp reversals given the level of fear in the market. Over the coming days these may present themselves as better shorting opportunities if todays lows are undercut (generating overhead supply). The first selection, MDPA, is trading at the upper end of resistance following todays heavy volume buying. The stock gained on increased earnings. Likely to see prices ease back to $1.00 which would be a better area for GTC buy orders. The second pick, MDCC, filed its 10-Q today. The breakout should be watched for a bull trap as the rally off $18.50 has left a slight bearish divergence in the MACD. A bull trap will be confirmed on a loss of $20.26. Resistance of $23.15 is the 52-week high for the stock. The last breakout candidate, UIC, looks to be entering a high volume blow out rally following an extensive move from $11.18 in early 2003. This is supported by a bearish divergence in the MACD and a slow stochastic reading that has dropped from overbought levels. There is no overhead resistance, so a modest price target is set, although point-n-figure charts show a much larger breakout that could reach as high as $42. The stock rose on news of a new $160m contract.

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"IBD" refers to Investors Business Daily