One final under-$10 name that's trending very close to triggering a near-term breakout trade is
(ENVI - Get Report)
, which is a provider of IP video processing and distribution solutions that enable the delivery of high-quality video to consumers. This stock has been hit hard by the bears in 2012, with shares off by a whopping 80%.
If you take a look at the chart for Envivio, you'll notice that this stock has been trending sideways for the last two months, with shares moving between $1.42 on the downside and $1.89 on the upside. Shares of ENVI are now starting to bounce off some near-term support at $1.59 a share and it's quickly moving within range of breaking out above the upper-end of its recent range. Any high-volume move outside of its sideways trading pattern will likely lead to the next major trend for shares of ENVI.
Traders should now look for long-biased trades in ENVI if it manages to break out above its 50-day at $1.82 a share and then once it clears more overhead resistance levels at $1.87 to $1.89 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 102.500 shares. If that breakout hits soon, then ENVI will set up to re-test or possibly take out its next major overhead resistance levels at $2.29 to $2.43 a share. Any high-volume move above those levels will then put $2.75 to $3 a share into focus for shares of ENVI.
This stock has a huge gap that could get filled if it were to ever take out $3 a share, since ENVI plunged and gapped down back in August from $6 to below $2.50 a share with huge downside volume.
Traders can look to buy ENVI off any weakness and simply use a stop that sits right below some near-term support levels at $1.57 to $1.50 a share. One could also buy ENVI off strength once it clears those breakout levels with volume and then simply use a stop that sits right around $1.59 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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