An under-$10 stock in the biotechnology and drugs complex that's trading very close to triggering a near-term breakout trade is Amicus Therapeutics (FOLD - Get Report), which is focused on the discovery, development and commercialization of a new class of orally administered, small molecule drugs, for the treatment of a range of human genetic diseases. This stock has been on fire so far in 2012, with shares up a whopping 75%.
If you take a look at the chart for Amicus Therapeutics, you'll notice that for the last two months, this stock has been uptrending from a low of $4.50 to its recent high of $6.15 a share. During that uptrend, shares of FOLD have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed FOLD within range of triggering a near-term breakout trade.Traders should now look for long-biased trades in FOLD once it manages to break out above some near-term overhead resistance at $6.15 with high volume. Look for a sustained move or close above $6.15 with volume that hits near or above its three-month average action of 838,068 shares. If that breakout triggers soon, then FOLD will setup to re-test or possibly take out its next significant overhead resistance levels at $6.89 to $7.29 a share. If those levels get taken out with volume, then FOLD could easily trade north of $8 a share in the near future. Traders can look to buy FOLD off any weakness, and simply use a stop somewhere below its 200-day moving average of $5.31 a share. A better strategy might be to buy off strength once FOLD clears $6.15 a share with volume, and then use a stop just below $5.60 a share. I would look to add to either position once FOLD takes out $6.89 to $7.29 a share with heavy volume.