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Breakouts for Oct 14th: These breakout plays should be tempered by a market which is still in correction. We are likely to see lower prices in these stocks over the days ahead which will provide better buying opportunities than current closing prices. The first pick, MATR, raised third earnings forecasts to move over resistance on heavy volume. The price target is based on the depth of the retracement from earlier this year. It represents good value at today's closing price, but stops should be kept not far below the rising support trendline from May lows. Partial profits should be taken at psychological resistance, namely $35 and $40. The second pick, PETC, reaffirmed guidance which was sufficient to push the stock to close at new highs. At today's closing price I would suggest adding to a position using GTC buy orders down to $35.20 with the suggested stop. The MACD trigger line did not undercut the zero line on retracement and on balance volume confirmed price action by moving to new highs - both bullish action. If you look at the weekly chart you will see today's action breaks a lengthy rectangular consolidation between $26 and $35 dating back to Nov of last year. This break should be significant - if it pops back into the trading range, sell. The third pick, TGC, is a speculative penny stock which rallied in the absence of company specific news. At today's closing price it is too extended to be buying, but the use of GTC orders down to $0.31 improve the risk:reward ratio if using a $0.29 stop. The reason for the optimism? All three technicals have made significant breakouts, so there is confirmation for the recent price and volume action.

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"IBD" refers to Investors Business Daily