Another under-$10 stock that's trending within range of triggering a near-term breakout trade is Senomyx (SNMX), which discovers, develops and commercializes flavor ingredients for the packaged food, beverage and ingredient supply industries by including savory and cooling flavors and flavor modulators, such as sweet and salt modifiers and bitter blockers. This stock has been red hot so far in 2013, with shares up 30%.
If you take a look at the chart for Senomyx, you'll notice that this stock has just started to bounce strongly higher right off its 200-day moving average of $1.99 a share with decent upside volume. This move is coming after shares of SNMX have been downtrending for the last month and change, with shares falling from its high of $2.94 to its recent low of $1.95 a share. If this bounce is signaling that the downside volatility for SNMX is over, then this stock could break out and trend significantly higher.
Market players should now look for long-biased trades in SNMX if it manages to break out above its 50-day moving average of $2.24 a share and then once it takes out more overhead resistance at $2.39 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 204,121 shares. If that breakout hits soon, then SNMX will set up to re-test or possibly take out its next major overhead resistance levels at $2.82 to $2.94 a share.Any high-volume move above $2.94 would then push SNMX into new 52-week territory, which is bullish technical price action. Some possible upside targets off that move are $3.10 to $3.89 a share.
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