Another under-$10 stock that looks ready to trigger a major breakout trade is Frontline (FRO - Get Report), which is engaged mainly in the ownership and operation of oil tankers and oil/bulk/ore carriers, which are currently configured to carry dry cargo. This stock has been hammered by the bears in 2013, with shares off by 31%.
If you take a look at the chart for Frontline, you'll notice that this stock recently plunged badly from its high of $3.68 to its low of $1.81 a share with heavy downside volume. During that move, shares of FRO were consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of FRO have started to rebound off that $1.81 low to its recent high of $2.37 a share. This stock has been making higher lows during that rebound and it's quickly moving within range of triggering a major breakout trade.
Market players should now look for long-biased trades in FRO if it manages to break out above some near-term overhead resistance levels at $2.30 to $2.37 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 861,670 shares. If that breakout hits soon, then FRO could experience a powerful bounce higher that takes it back toward its 50-day moving average of $2.86 a share or back to its 200-day moving average at $3.49 a share.Traders can look to buy FRO off any weakness to anticipate that breakout and simply use a stop that sits right around some key near-term support levels at $2.06 to $1.92 a share. One could also buy FRO off strength once it clears those breakout levels with volume and then simply use a stop right below $2.06 a share.