One more under-$10 name in the semiconductor complex that looks ready to rip significantly higher is ReneSola (SOL - Get Report), a global manufacturer of solar wafers and producer of solar power products based in the People's Republic of China. This stock is off to a slow start in 2012, with shares down by around 11%.
If you take a look at the chart for ReneSola, you'll see that the bears have been in full control of this stock for the past six months, with shares falling from a high of $3.38 to a recent low of $1.16 a share. During that monster move lower, shares of ReneSola have been consistently making lower highs and lower lows, which is bearish technical price action. That said, during the last two months, shares of SOL have started to stabilize and possibly make a bottom at around $1.17 to $1.16 a share. Now shares of SOL are quickly moving within range of triggering a major breakout trade.
Traders should now look for long-biased trades in SOL if this stock can manage to trigger a breakout trade above some near-term overhead resistance at $1.40 a share with high volume. Look for a sustained move or close above $1.40 a share with volume that clocks in near or above its three-month average action of 565,362 shares. If we get that action soon, then SOL could easily re-test or possibly take out its next major overhead resistance levels at $1.69 to $1.73 a share, or even its 200-day moving average of $1.91 a share. If SOL were to clear its 200-day with volume, this stock could even head towards $2.40 to $2.80 a share.One could look to buy SOL off any weakness and simply anticipate that breakout, and then simply use a stop right below some near-term support at $1.26 a share. One could also buy off strength once SOL clears $1.40 with high volume, and then simply use a stop right below today's low of $1.30 or even around that $1.26 support level. To see more hot under-$10 equities, check out the Stocks Under-$10 Setting Up To Explode portfolio on Stockpickr. -- Written by Roberto Pedone in Winderemere, Fla.
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