Zion Oil & Gas
One more under-$10 stock that's trending very close to triggering a near-term breakout trade is
Zion Oil & Gas
, which is engaged in oil and gas exploration in Israel. This stock has been hit hard by the sellers so far in 2013, with shares off by 29%.
If you take a look at the chart for Zion Oil & Gas, you'll see that this stock has been uptrending strong for the last month, with shares moving higher from its low of $1.14 to its recent high of $1.33 a share. During that move, shares of ZN have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of ZN within range of triggering a near-term breakout trade.
Traders should now look for long-biased trades in ZN if it manages to break out above its 50-day moving average of $1.26 a share and then once it clears more overhead resistance at $1.27 to $133 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 185,082 shares. If that breakout triggers soon, then ZN will set up to re-test or possibly take out its next major overhead resistance levels at $1.50 to $1.79 a share Any high-volume move above $1.79 to $1.83 will then put $1.92 to $2.10 into range for shares of ZN.
Traders can look to buy ZN off any weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $1.20 to $1.14 a share. One could also buy ZN off strength once it clears those breakout levels with volume and then simply use the same stop at around $1.20 to $1.17 a share.
To see more hot under-$10 equities, check out the
Stocks Under $10 Setting Up to Explode
portfolio on Stockpickr.
-- Written by Roberto Pedone in Winderemere, Fla.
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