Another under-$10 stock that's trending within range of triggering a near-term breakout trade is
(RAD - Get Report), which operates a retail drugstore chain in the U.S. This stock has been on fire so far in 2013, with shares up sharply by 70%.
If you take a look at the chart for Rite Aid, you'll notice that this stock recently gapped up sharply from $1.80 to over $2.10 a share with heavy upside volume. Following that gap up, shares of RAD have continued to spike higher with monster upside volume. That move is quickly pushing shares of RAD within range of triggering a near-term breakout trade.
>>5 Consumer Stocks Ready to Push Higher
Traders should now look for long-biased trades in RAD if it manages to break out above some near-term overhead resistance at $2.44 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 13.97 million shares. If that breakout triggers soon, then RAD will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $3 to $3.50 a share, or possibly even $4 a share.
Traders can look to buy RAD off weakness to anticipate that breakout and simply use a stop that sits a bit below some key near-term support at $2.16 a share. One can also buy RAD off strength once it clears $2.44 with volume and then simply use a stop just below $2.30 to $2.25 a share.
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