An under-$10 stock in the biotechnology and drugs complex that's close to triggering a major breakout trade is Ampio Pharmaceuticals (AMPE - Get Report), which is engaged in discovering and developing pharmaceutical drugs and diagnostic products to identify, treat, and prevent a range of human diseases including metabolic disorders, eye disease, kidney disease, acute and chronic inflammation, and male sexual dysfunction. This stock has been acting weak so far in 2012, with shares down by around 14% so far.
If you take a look at the chart for Ampio Pharmaceuticals, you'll notice that this stock has started to uptrend since mid-August, with shares soaring from $2.55 to its recent high of $3.70 a share. During that uptrend, shares of AMPE have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed AMPE within range of triggering a big near-term breakout trade.
Traders should now look for long-biased trades in AMPE once it breaks out above some near-term overhead resistance at $3.65 a share with high volume. Look for a sustained move or close above $3.65 with volume that hits near or above its three-month average action of 652,983 shares. If that breakout triggers soon, then AMPE will have a great chance of trending up towards its next significant overhead resistance levels at $5.29 to $6.25 a share.At last check, shares of AMPE have hit an intraday high of $3.70 and volume has already hit over 800,000 shares. If AMPE can hold these gains today, then it could be in the early stages of triggering that breakout. Traders can now look to buy AMPE off weakness, and simply use a stop somewhere below today's low of 3.40 a share. Traders can also look for long-biased trades as long as AMPE is trending above $3.65 with strong upside volume.
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