I am seeing a ton of bullish setups this week. It’s more than I’ve seen in a long time — maybe the most since late winter 2011. It’s exciting to see stocks attempting breakouts again, yet worrisome at the same time.

As much as I want to be bullish here, I’m still a little spooked by this market and what has become the longest, more boring economic crisis in the history of mankind. As much as the slow-motion eurozone meltdown has fallen off the front page, its potential threat as a wrench in the market’s gears is still very real.

With that in mind, I’m going to take a look at several stocks fighting to break out this week. All of these names are at or near important resistance levels…

A couple of notes about resistance before we go to the charts: First, resistance is an area, not a cut-and-dry line as it’s most often depicted. Also, many stocks have multiple areas of resistance — some more important than others. For all of the stocks I’m featuring today, a resistance break could signal the start of a new uptrend. Or it could fail and knock the stock back to into its trading range.

The bottom line is that you need to prepare to go long — but also be ready for disappointment if the market tells you its gains to start the year are too much to handle right now. Don’t try to anticipate a big move — let the market come to you…

Freescale Semiconductor Inc. (NYSE:FSL): FSL has a nice look to it right now. We’re seeing a very strong move this afternoon, but the stock is pulling back from its highs. It will need to close above $14.70 to prove the buying power behind it wants shares to trade higher. Look at the long wicks poking above resistance on the chart below. These are two other attempts to hold $14 that failed in the past three months. If you tried to buy on the intraday break, you would have been stuck with a losing trade:

Oasis Petroleum Inc. (NYSE:OAS): Oasis is another name that popped at the open, only to endure a steady sell-off as the day progresses. A hold of $34 is crucial to keep this stock’s momentum intact:

Network Engines Inc. (NASDAQ:NEI): Here’s an interesting microcap to keep an eye on. A big jump from $1 to $1.25 to start the year might be weighing on shares right now. The stock consolidated for more than a week, and shares are now eying strong resistance at $1.30. I would recommend waiting for more convincing evidence that this stock is primed for another run. Look for a volume spike to coincide with any swing to the upside. If the volume confirmation isn’t there, stay away from this one:

Penny Promotions

[Editor’s note: In this section of Market Movers, we expose stocks that are currently the subject of promotional material. If you’re unfamiliar with promotions, pumps and dumps, or other penny stock scams, please take the time to read this column before continuing. Unless you are an experienced trader, we recommend that you avoid these stocks at any price.]

Stevia Corp. (OTC:STEV): Stevia has been pumped before in print mailers — and now I’m seeing the stock make yet another monster move — 150% in just 2 days. I haven’t seen the new promotional material for this go-round, but I’m all but certain Stevia shares aren’t moving that far, that fast all on their own. I would not be surprised to see this stock back below $1 in short order…

North Springs Resources Corp. (OTC:NSRS): If I never see this ticker again, it will be too soon. During the first two and a half weeks of 2012, my spam filter has nabbed countless NSRS promotions. It feels as if every pumper in the country has been assigned this stock — and they’re going to make sure the company gets its money’s worth.

Unfortunately, I don’t think this stock is going to go quietly into the night. Judging by how the chart is setting up, I’m guessing that this could be a longer-term pump — much like we saw from Jammin Java Corp. (OTC:JAMN) early last year. We’re probably in store for multiple shakeouts and re-pumps, culminating in one devastating drop. But that’s just a guess. It’s impossible to know exactly what the manipulators have in mind, which is what makes stocks like this so dangerous to trade.

Sincerely,

Greg Guenthner
for The Penny Sleuth

Greg Guenthner

Greg Guenthner heads up Agora Financial’s small-cap division and is the founder of one of the only independent OTC research advisories in the industry. A graduate of George Mason University, Guenthner joined Agora in 2005 after several years as a journalist. He is managing editor of Penny Stock Fortunes and Bulletin Board Elite.

View articles by Greg Guenthner