Another under-$10 stock that's setting up to trigger a near-term breakout trade is
(MDGN), a medical technology and therapeutics company focused on providing sustained protein therapies. This stock has been on fire so far in 2012, with shares up a whopping 275%.
If you take a look at the chart for Medgenics, you'll see that this stock has been downtrending for the last four months, with shares falling from a high of $16.43 to a recent low of $8.25 a share. During that downtrend, shares of MDGN have been mostly making lower highs and lower lows, which is bearish technical price action. That said, shares of MDGN have recently started to bounce off its 200-day and are now pushing within range of triggering a near-term breakout trade.
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Market players should now look for long-biased trades in MDGN once it manages to trigger a break out above some near-term overhead resistance levels at $9.75 to $11 a share, and then above $11.45 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 65,140 shares. If that breakout triggers soon, then MDGN will setup to re-test or possibly take out its next major overhead resistance level at $13.50 a share. Keep in mind that any move above $10.63 will also push MDGN back above its 50-day moving average.
Traders can look to buy MDGN off any weakness as long as it's trending above its 50-day at $9.75 to $11 a share with strong upside volume flows. You could also buy off strength once MDGN takes out $11 to $11.45 a share with high volume, and then simply use a stop just below its 50-day at $10.63 a share.