One under-$10 stock that's starting to trigger a big breakout trade today is semiconductor player Canadian Solar (CSIQ). This company designs, develops, manufactures and sells solar cell and solar module products that convert sunlight into electricity for a variety of uses. This stock has been a monster for the bulls, with shares up over 69% so far in 2012.
If you take a look at the chart for Canadian Solar, you'll see that this stock was stuck in a nasty downtrend until it hit a recent low of $2.07 a share. After printing that low, the stock completely reversed its downtrend and started to uptrend strong. That uptrend was identifiable once the stock started to make higher lows and higher highs on a consistent basis. The stock also gave a hint that the sellers were done once the upside volume days started to show dramatic activity.
Now shares of CSIQ are starting to trigger a near-term breakout trade with the stock starting to move above $4.24 with monster volume. At last check, CSIQ has cleared $4.24 and the volume is very strong. Volume today is already above 2.5 million shares, which is well above its three-month average action of 1.06 million shares. Market players should watch for a sustained high-volume move and close over $4.24 to signal that this stock wants to trend much higher.If you're bullish on CSIQ, I would look to buy the stock off any weakness as long as it continues to trend above $4.24 a share. I would simply use a mental stop maybe a few percentage points below $4.24 in case this breakout fails. Target a run back towards $5 to $5.97 (200-day), or possibly higher if CSIQ continues to uptrend strong and trend above that key breakout level.
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