Another under-$10 name in the computer services complex that's trading very close to triggering a major breakout is
. Through its operating subsidiaries, KIT Digital provides enterprise clients an end-to-end technology platform for managing IP-based video assets across the browser, mobile device and Internet protocol television IPTV set-top box-enabled television sets. This stock is off to a rough start in 2012, with shares off by around 54%.
If you take a look at the chart for KIT Digital, you'll see that this stock has been stuck in a nasty downtrend for the last four months, with shares dropping from a high of $12.65 to a recent low of $2.64 a share. During that sharp move lower, shares of KITD have consistently made lower highs and lower lows, which is bearish technical price action.
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That said, the stock has started to bounce strong off that low of $2.64 with shares now trading just under $4 a share. That bounce is quickly pushing KITD within range of triggering a near-term breakout trade.
Market players should now look for long-biased trades in KITD if it can manage to trigger a breakout above some near-term
at $4.20, and then above a recent gap-down day high of $5 a share with high-volume. Look for volume off a sustained move or close above those levels that register near or above its three-month average action of 1.7 million shares. If we get that action soon, then KITD will look even more bullish if it takes out its 50-day
at $5.12 a share with volume. This stock could easily spike back towards $7 a share or higher if all those levels get taken out to the upside with heavy volume.
I would look to buy KITD off strength once it takes out $4.20 with volume, and then add once it blasts above $5 to $5.12 a share with volume. Once could simply use a stop just a few percentage points below $4.20 if that breakout triggers, just in case KITD isn't ready to trend higher.
I also featured KIT Digital yesterday in "
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