One stock that's trading right below a couple of key technical breakout levels is KiOR (KIOR), a renewable fuels company that has developed a technology platform to convert non-food biomass into hydrocarbon-based oil. This stock is blazing a trail so far in 2012, with shares up over 19%.
If you look at the chart for KiOR, you'll notice that the bears dismantled this stock from its late November high of $18.39 to a recent low of just $8.67 a share. After printing that low, the stock found some big buying support right around $9 a share, and since then it has rallied strong to its current price of just over $12 a share. This rally has moved KIOR back above its 50-day moving average of $11.94, and it now puts the stock within range of a number of key breakout levels.
Traders should put KIOR on their radar for a breakout trade if this stock can manage to clear some near-term overhead resistance at $13.19 and $13.50 with heavy volume. Look for volume on any move above those levels that's near or well above its three-month average action of 77,521 shares. If we get that action, then this stock has a great chance to make a run at that late December high of $18.39.You could be a buyer of KIOR off any weakness and simply anticipate the breakout. I would use a mental stop that's a few percentage points below the 50-day if you buy off weakness. You could also buy off strength and get long once $13.19 is taken out with volume, and then add above $13.50 a share. This is another breakout candidate with a large amount of bears involved in the stock. The current short interest for KIOR stands at 12.4% of its tradable float. That high short interest, combined with the stock's low 16.10 million float, makes it an awesome short-squeeze candidate if we get that breakout soon. For another take on KiOR, check out "4 Companies That Are Bleeding Cash."
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV