"Flir Systems Inc. (NASDAQ: FLIR) provides thermal-imaging and infrared camera equipment for military, law enforcement, and commercial applications," notes Leo Fasciocco.

In his Ticker Tape Digest, which focuses on stocks showing technical breakouts, he explains, "FLIR has convincingly broken out from a five-week base, boosted by the win of a $359 million contract from the Army."

"FLIR, with annual revenues of $855 million, has been a sensational winner since 2001. It is a beneficiary of the war on terror and the need for equipment to combat it via military and security needs. 

"Short-term, the daily chart shows the stock crossing its resistance line at 35.54. The move sends the stock over not only near-term resistance but also over the peak made back in early November. The action indicated very astute institutional buying.

"This year, FLIR's earnings should jump 32% to $1.18 a share from 89 cents a share a year ago. The  stock sells with a price-earnings ratio of  30 based on this year's earnings.  Next year, analysts forecasting a 20% rise in net to $1.41 a share.

"For the upcoming second quarter, the Street looks for a 40% rise in net to 27 cents a share from 19 cents a year ago. The highest estimate on the Street is at 28 cents a share. FLIR tends to meet or top the consensus Street estimate by up to 3 cents a share. We see sees chances for a mild upside surprise.

"The company's revenues are growing at 47%. It is benefiting from strong demand in all areas of its business - airborne, land and maritime products.

"FLIR's breakout is impressive.  We remain very bullish on the stock. We are targeting FLIR for a move to 46. Conservative investors can scale-in. A protective stop can be placed near 34. We rate FLIR a very good intermediate-term play provided earnings growth remains on course.

"Institutional sponsorship is very good. Many of the top funds holding the stock have been adding to their positions. The largest fund holder is Fidelity Magellan Fund with a  6.3% stake. A key buyer recently was 2-star rated Franklin Small Mid-cap Growth Fund which purchased 2.9 million shares."