One under-$10 stock that's trending very close to triggering a major breakout trade is
(RBCN - Get Report), which manufactures synthetic electronic materials for opto-electronic, semiconductor fabrication, telecommunications and optical and laser applications. This stock has been hit hard by the bears during the last six months, with shares down by 30%.
If you take a look at the chart for Rubicon Technology, you'll notice that this stock has been trending range bound for the last three months, with shares moving between $5.82 on the downside and $6.98 on the upside. Shares of RBCN have just started to move back above its 50-day moving average of $6.40 a share and it's quickly moving within range of triggering a breakout trade above the upper-end of its recent sideways trading pattern.
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Traders should now look for long-biased trades in RBCN if it manages to break out above some near-term overhead resistance levels at $6.75 to $6.86 a share and then once it takes out more overhead resistance at $6.98 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 334,422 shares. If that breakout triggers soon, then RBCN will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day of $8.68 to $9.50 a share. Any move above $9.50 a share will then put $10 to $10.77 into focus for shares of RBCN.
Traders can look to buy RBCN off any weakness to anticipate that breakout and simply use a stop that sits right around some near-term support at $6.20 to $6 a share. One could also buy off strength once RBCN clears those breakout levels with volume and then simply use the same stop that sits right below its 50-day moving average of $6.40 a share.
This stock is a favorite target of the short sellers, since its current short interest as a percentage of its float is 20.9%. If that breakout triggers soon, then watch for a short-squeeze to develop that could send this stock flying higher in a very short timeframe.
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