Though last week’s loss for the overall market was the first weekly loss in the last seven, many small cap stocks are sustaining their rallies, and for good reason (i.e. the trends may have longevity). We’ve examined the potential picks of the litter below.

The most encouraging part about the recent broad strength, however, has been the diversity of these breakouts. There’s no single sector bolting higher like the financials did - errantly - following the TARP announcement, or the way gold surged in November when it was assumed inflation was going to surge.

Rather, we’re seeing some stocks in certain sectors advance, while other stocks in the same sectors decline. Some large caps are rising, while others are falling. The same goes for small caps mid caps, and every individual industry…. there’s just a lot of intra-market divergence shaping up.

We’ve stayed true to our site’s focus and only looked at breakouts from the small cap realm, with one mid-cap exception.

Boyd Gaming Corp. (BYD)

Betting looks like it could be back en vogue. Boyd Gaming shares’ push above $7.55 last week meant the stock hit a multi-month high, having gained 169% off of March’s low. Boyd’s big move last week was largely prompted by Pinnacle Entertainment’s (PNK) good news. Pinnacle’s Q1 results were better than Wall Street expected; Penn National Gaming (PENN) also posted strong first quarter numbers last week. The market’s betting - and it’s not a bad bet - that Boyd’s numbers are going to be solid as well.

Hansen Medical Inc. (HNSN)

This stock made our breakout list despite having a few reasons not to rally.

Primarily, the medical device maker’s Sensei equipment is quickly falling out of favor with doctors, as it’s been implicated in the death or further harm of patients it’s been used with. There’s been no confirmation that Hansen’s equipment was the key cause for added problems with patients, but the negative buzz is getting louder.

Top that off with a recent round of equity financing at $3.05 per share, it’s no wonder the stock fell to sub-$3.00 this month.

Then a funny thing happened… the stock has made its way back up to $5.08… a 37% pop in one week’s time. Perhaps all the ‘bad’ that could be priced in has been fully priced in. Maybe that’s why so many insiders were the ones buying at $3.05 a few days ago.

O’Charley’s Inc. (CHUX)

We’re not going to rehash our restaurant chat we posted a few days ago - you can read it by going here, since it seems to still apply. Long story made short, O’Charley’s and other restaurants appear to have done much better during the darkest period of the recession than anybody felt they could. Now it’s time to reprice these stocks to appropriate levels.

That said, CHUX has more than tripled since early March, so it may be a little too hot to grab onto right now.

Huntsman Corp. (HUN)

There’s probably nothing in the world more uninteresting than a company that manufactures polyurethanes, performance chemicals, and pigments. On the other hand, any stock that gains 20% over four trading days, or gains more than 100% in seven weeks, is automatically interesting. The stock suffered in 2008 as the need for all basic materials dried up. However, HUN’s punishment is now being viewed as excessive… and the market is undoing the undue damage. Even with the recent rise, this stock is still trading at about 1/5 its pre-recession value.

Beazer Homes USA Inc. (BZH)

Yep, a homebuilder made the hot list. News that March’s new home sales edged slightly higher for the second month in a row has lifted the whole group recently, translating into a gain of 27% for Beazer last week (and a 772% gain off of March’s low). However, that alone isn’t the reason for BZH’s renewed strength.

Beazer has also been the subject of take-over chatter…. not from any potential suitors, but from stock speculators. Beazer is relatively loaded with debt, and its competition knows it. Beazer could be forced to sell itself - or pieces of itself - for a song. However, any acquisition is still expected to offer a lot of upside for current BZH owners.

That’s all for now, but stay tuned…. we’re starting to see more and more longer-lasting breakouts.

Never miss another money-making breakout again! Sign up for the free Small Cap Network e-newsletter, and we’ll let you know about the biggest and best breakouts other news sources are overlooking.