Another under-$10 name that's quickly moving within range of triggering a near-term breakout trade is Rediff.com (REDF - Get Report), which is engaged in the business of providing online internet based services, focusing on India and the global Indian community. This stock has been pressured by the sellers during the last six months, with shares off by 33%.
If you take a look at the chart for Rediff.com, you'll notice that this stock has started to form a bottoming pattern during the last two months between $2.58, $2.63 and $2.68 a share. Shares of REDF are starting to spike off those support levels and it's quickly moving within range of triggering a big breakout trade above a key downtrend line. That downtrend line has acted as resistance for REDF for about three months.
Market players should now look for long-biased trades in REDF as long as it's trending above those $2.63 to $2.58, and then once it breaks out above its 50-day at $2.81 a share and then above more overhead resistance levels at $3.01 to its 200-day at $3.08 a share with high volume. Look for a sustained move or close above those levels with volume that registers near or above its three-month average action of 69,000 shares. If that breakout triggers, then REDF will set up to re-test or possibly take out its next major overhead resistance levels at $3.19 to $3.39 a share. Any high-volume move above $3.39 will then put $3.82 to $4.45 into range for shares of REDF.
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