Traders should now look for long-biased trades in ZGNX if it manages to break out above its gap down day high of $1.44 a share with high volume. Look for a sustained move or close above $1.44 a share with volume that hits near or above its three-month average action of 1,386,640 shares. If that breakout hits soon, then ZGNX will set up to re-fill some of its previous gap down zone that started at $2.36 a share. Some possible upside targets off that breakout are its 200-day at $2.21 or its 50-day at $2.34 a share.
Traders can look to buy ZGNX off any weakness and simply use a stop that sits right below some near-term support levels at $1.30 to $1.20 a share. One could also buy ZGNX off strength once it clears $1.44 a share with volume and then simply use a stop that sits right around $1.30 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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