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One more under-$10 stock that's setting up to trend higher is
Neoprobe(NEOP), a biomedical company that develops and commercializes oncology products. This stock has been struggling so far this year, with shares off by around 18%.
This company announced on Wednesday night that its New Drug Application for Lymphoseek has been accepted for review by the U.S. Food and Drug Administration. Lymphoseek is a new lymph-node mapping agent used to determine the spread of cancer. This news has spiked that stock over 6% today at last check on heavy volume.
If you take a look at the chart for Neoprobe, you'll notice that this stock is quickly approaching a big breakout if it can manage to trade above a key descending trend line that started back in June at around $3.90 a share. Look for this stock to trigger that conformation by trading above $3.25 a share with strong volume. Volume so far today is tracking in very strong with over 1.1 million shares traded, which is well above its three-month average volume of 777,000 shares.
If we do see a breakout above that key descending trend line, then this stock is likely to re-test its 200-day moving average of $3.48 a share. Once we get above that area with volume, then I like this stocks chances to make a monster move back towards $5.50 a share or possibly even higher.
One could be a buyer of this stock on any weakness and anticipate the breakout, or simply wait for the breakout and buy off strength. I would simply use a mental stop just below some major support at $2.75 a share if you buy off weakness. If you enter off of strength, I would get long on the break above $3.25 or above $3.50 with a mental stop a few percentage points below either entry point.
This is another heavily shorted stock with around 13% of the tradable float currently sold short by the bears. If you see some of those overhead resistance levels I mentioned start to get taken out to the upside, then look for a big short squeeze to kick off for NEOP.
>>10 Most Shorted Stocks in Biotech
To see more hot under-$10 stocks, including
Adventrx Pharmaceuticals(ANX) and
Harvard Bioscience(HBIO), check out the
Stocks Under-$10 Setting Up to Trade Higher portfolio on Stockpickr.
-- Written by Roberto Pedone in Winderemere, Fla.