One more under-$10 stock that's moving within range of a near-term breakout trade is
(LEI - Get Report)
, an independent oil and gas company, based in Houston, with approximately 12,500 gross acres of oil and gas leases in South Texas. This stock is off to a slow start so far this year, with shares down by over 15%.
If you take a look at the chart for Lucas Energy, you'll notice that this stock has been uptrending strong for the last two months, with shares soaring from $1.25 to its recent high of $1.98 a share. During that uptrend, shares of LEI have been consistently making higher lows and higher highs, which is bullish
technical price action
. That move has now pushed LEI within range of triggering a major near-term breakout trade.
Traders should now look for long-biased trades in LEI once it manages to break out above some near-term overhead resistance levels at $1.97 to $1.98 a share, and then its 200-day moving average at $2.04 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 action of 146,533 shares. If that breakout hits soon, then LEI will setup to re-test or possibly take out its next major overhead resistance levels at $2.40 to $3 a share.
One could look to buy LEI off any weakness and simply anticipate that breakout, with a stop that sits just below its 50-day moving average of $1.70 a share. One could also get long LEI once it takes out $1.97 to $2.04 a share with volume, and then simply use a stop at around $1.80 a share.
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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