GT Advanced Technologies
One under-$10 stock that's trending very close to triggering a near-term breakout trade is GT Advanced Technologies (GTAT), which is a global provider of polysilicon production technology, crystalline ingot growth systems and related photovoltaic manufacturing services for the solar industry. This stock has been hammered by the sellers during the last three months, with shares down by 35%.
If you take a look at the chart for GT Advanced Technologies, you'll notice that this stock has been downtrending badly for the last five months, with shares plunging from its high of $7.09 to its recent low of $2.82 a share. During that downtrend, shares of GTAT have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of GTAT have started to rebound off that $2.82 low and move back above its 50-day moving average of $3.33 a share. That move is quickly pushing GTAT within range of triggering a near-term breakout trade.
Traders should now look for long-biased trades in GTAT if it manages to break out above some near-term overhead resistance levels at $3.55 to $3.81 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 3,707,820 shares. If that breakout triggers soon, then GTAT will set up to re-test or possibly take out its next major overhead resistance levels at $4.97 to $5.27 a share. Any high-volume move above those levels will then put $6.25 to $7 into range for shares of GTAT.Traders can look to buy GTAT off any weakness to anticipate that breakout and simply use a stop that sits right around some near-term support at $3.07 a share. One could also buy off strength once GTAT clears those breakout levels with volume and then simply use the same stop that sits right below its 50-day moving average of $3.34 a share. Traders should also keep in mind that GTAT is a favorite target of the short sellers, since its current short interest as a percentage of its float is a whopping 30.2%. If that breakout triggers soon, then we could easily see an epic short-squeeze develop for GTAT.