Another stock that's moving within range of triggering a near-term breakout trade is KiOR (KIOR), which has developed a proprietary technology platform to convert low-cost, abundant and sustainable non-food biomass into hydrocarbon-based oil. This stock is off to a slow start in 2013, with shares down by 8.5%.
If you look at the chart for KiOR, you'll notice that this stock has been downtrending for the last three months, with shares dropping from its high of $8.48 to the recent low of $5.45. During that downtrend, shares of KIOR have been mostly making lower highs and lower lows, which is bearish technical price action. That said, shares have started to bounce off that $5.45 low and move into range of triggering a near-term breakout trade.
Traders should now look for long-biased trades in KIOR once it manages to break out above some near-term overhead resistance levels at $6.17 a share to its 50-day moving average at $6.19 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 volume of 243,455 shares. If that breakout triggers soon, then KIOR will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $7.33 to $7.66 to $7.90 a share. Any high-volume move above $7.90 will then out $8.48 into range for shares of KIOR.Traders can look to buy KIOR off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $5.50 to $5.45 a share. One can also buy off strength once KIOR takes out those breakout levels with volume and then simply use a stop right above $5.50 to $5.45 a share. This is another name that is a favorite target of the short-sellers, since the current short interest as a percentage of the float for KIOR is pretty high at 16.9%. If that breakout triggers soon, then KIOR could easily experience a sharp short-covering rally.