Alliance One International
One under-$10 name that's trending very close to triggering a near-term breakout trade is Alliance One International (AOI - Get Report), which is a supplier of quality tobacco products and innovative solutions to the world's manufacturers and marketers of tobacco products. This stock has shown modest strength so far in 2012, with shares up 23%.
If you take a look at the chart for Alliance One International, you'll notice that this stock has been uptrending for the last month and change, with shares moving higher from a low of $2.87 to its recent high of $3.39 a share. During that uptrend, shares of AIO have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of AOI within range of triggering a near-term breakout trade.
Traders should now look for long-biased trades in AOI once it manages to break out above some near-term overhead resistance levels at $3.39 to $3.41 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 177,021 shares. If that breakout hits soon, then AOI will set up to re-test or possibly take out its next major overhead resistance levels at $3.63 to $3.70 a share, or possibly even $3.90 to $4 a share.Traders can look to buy AOI off any weakness and simply use a stop that sits right around its 50-day moving average of $3.17 a share. One could also buy AOI off strength once it takes out those breakout levels with high volume and then simply use a stop that sits just below its 200-day at $3.24 a share.