One more under-$10 stock in the semiconductor complex that's trading within range of triggering a major breakout trade is Audience (ADNC), a provider of voice and audio solutions that improve voice quality and the user experience in mobile devices. This stock has been destroyed by the sellers so far in 2012, with shares down by an eye-popping 69%.
If you take a look at the chart for Audience, you'll notice that this stock recently gapped down big from over $18 to a low of $5.80 a share with monster volume. That plunge happened in early September, and since then the stock has gone on to spike up briefly to $7.20 and then drop again and hit a new low of $5.51 a share. That action has pushed ADNC into extremely oversold territory, since its current relative strength index reading is now 19.32. Oversold can always get more oversold, but ADNC is starting show some life as it pushes into range of triggering a near-term breakout trade.
Traders should now look for long-biased trades in ADNC once it manages to break out above some near-term overhead resistance levels at $5.84 to $6, and then above $7.20 to $7.36 a share with high volume. Look for a sustained move or close above those levels with volume that hits near or above its three-month average action of 320,895 shares. If that breakout triggers soon, then look for ADNC to re-fill some of that previous gap and possibly hit its 50-day moving average of $12.08 a share.One could look to buy ADNC off weakness to anticipate that breakout, and simply use a stop that sits right around that recent low of $5.51 a share. One could also buy off strength once ADNC clears $5.84 to $6 a share with high volume, and then simply use a stop right below $5.51 share. I would add to either position once ADNC takes out $7.20 to $7.36 with heavy volume, and then look the stock to quickly get into that gap. 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.
Twitter and become a fan on Facebook.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV