ARC Document Solutions
One under-$10 stock that's trending very close to trigger a major breakout trade is ARC Document Solutions (ARC - Get Report), which provides highly specialized document management services, document distribution and logistics, and print-on-demand services. This stock has been hammered by the sellers during the last six months, with shares off by 43%.
If you take a look at the chart for ARC Document Solutions, you'll notice that this stock is just starting to move back above its 50-day moving average of $2.45 a share with decent volume. This move is quickly pushing shares of ARC within range of triggering a major breakout trade. That breakout would send shares of ARC above its recent consolidation pattern, which has the stock trending between $2.27 on the downside and $2.81 on the upside.
Traders should now look for long-biased trades in ARC if it manages to break out above some near-term overhead resistance levels at $2.55 to $2.65 a share and then once it clears more resistance at $2.81 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 125,316 shares. If that breakout triggers soon, then ARC will set up to re-test or possibly take out its next major overhead resistance levels at $3.60 to its 200-day moving average at $3.82 a share. Any high-volume move above its 200-day would then put $4.15 to $4.24 into range for shares of ARC.Traders can look to buy ARC off any weakness to anticipate that breakout and simply use a stop that sits just below some near-term support levels at $2.27 to $2.19 a share. One can also buy ARC off strength once it takes out those breakout levels with volume and then simply use a stop that sits just below its 50-day moving average at $2.45 a share.