Another under-$10 that looks poised for higher prices here is
(SQNM - Get Report), which provides products, services, diagnostic testing, applications, and genetic analysis products that translate the results of genomic science into solutions for biomedical research, translational research, molecular medicine applications and agricultural and livestock research. This stock is off to a slow start in 2012, with shares down by around 12% so far.
If you take a look at the chart for Sequenom, you'll notice that this stock has been crushed by the bears since early May, when the stock dumped from a high of $5.83 to a recent low of $3.45 a share. During that sharp move lower, shares of SQNM have consistently made lower highs and lower lows, which is bearish
technical price action. That said, shares of SQNM have now started to make higher lows and some higher highs, as the stock as rebounded off that $3.45 low. That recent rebound, and possible trend change, is quickly pushing SQNM within range of triggering a near-term breakout trade.
>>22 Biopharma Stocks With Breakout Potential in 2012
Traders should now look for long-biased trades in SQNM if it can manage to trigger a breakout trade above some near-term overhead resistance at $4.17 to $4.34 a share, and then some more resistance at $4.57 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average volume of 3,593,210 shares. If we get that action soon, then SQNM could easily setup to spike big back towards its May highs at $5.44 to $5.83 a share. Make note that if SQNM takes out $4.34 a share, then it will push the stock through both its 50-day and 200-day
, which is technically bullish price action.
If you're bullish on SQNM, then one could buy off weakness and simply use a stop near its previous support zones at $3.64 to $3.45 a share. If you get long off weakness, then I would add to the position once SQNM clears those breakout levels mentioned above with high volume.
This stock is a favorite among the short-sellers. The current short interest as a percentage of the float for SQNM is extremely high at 26.3%. If we see volume start to move into SQNM and the stock takes out those near-term resistance levels, then a massive short-squeeze could easily kickoff that sends this stock skyrocketing.