One under-$10 stock that's trending very close to triggering a major breakout trade is Pain Therapeutics (PTIE), which is a biopharmaceutical company that develops novel drugs. This stock has been trashed by the sellers during the last three months, with shares dropping 50%.
If you take a look at the chart for Pain Therapeutics, you'll see that this stock has been uptrending strongly for the last two months, with shares moving higher from its low of $2.06 to its recent high of $2.89 a share. During that uptrend, shares of PTIE have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of PTIE within range of triggering a major breakout trade.
Traders should now look for long-biased trades in PTIE if it manages to break out above some near-term overhead resistance levels at $2.89 a share to its 200-day moving average of $3.05 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 238,910 shares. If that breakout triggers soon, then PTIE will set up to re-test or possibly take out its next major overhead resistance levels at $3.80 to $4.48 a share.Traders can look to buy PTIE off any weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support levels at $2.40 to $2.34 a share. One could also just buy off strength once PTIE clears those breakout levels with volume and then simply use the same stop that sits right around its 50-day moving average of $2.47 a share.
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