Another under-$10 name that should be on your radar right now is video game maker
(COOL - Get Report). This stock has been a market leader in 2011, with shares up by a whopping 330%.
If you take a look at the chart for Majesco, you'll notice that this stock sold off hard from its June high of $4.53 to a recent low of $1.61 a share. Since hitting that low, the stock has rebound back to over $3 a share and its now nearing a major breakout. Traders should now be watching this stock for a breakout play if shares can manage to move above some past overhead resistance at $3.47 to $3.57 a share on heavy volume.
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Volume on Thursday registered 2.29 million (an up day), which is well above its three-month average action of 1.31 million shares. Market players should now watch for any future breakout that shows a continuation of that high volume pattern. If we do indeed get the high volume breakout, then I think this stock can easily re-test its
of $4.53 a share.
One could be a buyer of this stock off any significant weakness and simply anticipate the breakout. I would use a mental stop just below some near-term support at $3 a share. A better way to play this is to simply buy the breakout once it takes out $3.47 to $3.57 with strong volume.
The current short interest as a percentage of the float for COOL is 5.5%. If we do see that breakout in the coming days or weeks, then look for a solid short-covering rally to materialize since the short interest is decent here.