A stock under-$10 name in the chemical manufacturing complex that's worth eyeing here is
(PEIX - Get Report), a marketer and producer of low-carbon renewable fuels in the Western U.S. This stock has traded virtually flat in 2011, with shares up by just 1.15%.
If you take a look at the chart for Pacific Ethanol, you'll notice that this stock plunged from its June high of close to $2.50 a share to a recent low of 25 cents a share. After hitting that low, the stock started to trade sideways and broke out over 36 cents and then run up to its current price of 73 cents. Now the stock is
setting up for a major breakout if it can manage to clear some past overhead resistance with high volume.
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Market players should now watch for PEIX to clear 77 cents on volume that's close to or well above its three-month average action of 4.35 million shares. The stock has already hit 75 cents today intraday trading and volume is tracking in very strong at over 4.68 million shares at last check. If this stock does trigger a breakout in the coming days or weeks over 77 cents, then look for a monster move back towards $1.12 or possibly much higher.
Once could simply be a buyer of this stock off any near-term weakness and simply use a stop at around 70 cents a share. You could also just buy into strength and get long once 77 cents is taken out to the upside with heavy volume. Use a tight mental stop just below 77 cents if you buy off of strength.