Super Micro Computer
One final under-$10 name that's trending very close to triggering a major breakout trade is Super Micro Computer (SMCI), which develops and provides high performance server solutions based upon an innovative, modular and open-standard architecture. This stock has been hit hard by the bears so far in 2012, with shares off by 39%.
If you take a look at the chart for Super Micro Computer, you'll see that this stock has been uptrending strong for the last month and change, with shares soaring from a low of $7.85 to its recent high of $9.66 a share. During that uptrend, shares of SMCI have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of SMCI within range of triggering a major breakout trade.
Traders should now look for long-biased trades in SMCI once it breaks out above some near-term overhead resistance at $9.66 a share with high volume. Look for a sustained move or close above $9.66 with volume that registers near or above its three-month average action of 264,373 shares. If that breakout triggers soon, then SMCI will set up to re-test or possibly take out its next major overhead resistance levels at $11 to $12.50 a share, or possibly even its 200-day at $13.49 a share.Traders can look to buy SMCI off any weakness and simply use a stop that sits either below its 50-day at $8.93 a share or just below some more support at $8.50 a share. One could also buy SMCI off strength once it clears $9.66 a share with volume and then simply use a stop that sits just below its 50-day moving average of $8.93 a share. 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.
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