Security National Financial
Another under-$10 stock that's quickly moving within range of triggering a near-term breakout trade is Security National Financial ( SNFCA), which operate in three business segments: life insurance, cemetery and mortuary services and mortgage loans. This stock has been under a bit of pressure in 2013, with shares off by 9.8%.
If you take a look at the chart for Security National Financial, you'll notice that this stock recently formed a double bottom chart pattern at $6.55 to $6.60 a share. Shares of SNFCA have now also started to bounce right off its 200-day moving average of $6.60 a share with decent upside volume. This move is quickly pushing the stock within range of triggering a near-term breakout trade.Market players should now look for long-biased trades in SNFCA if it manages to break out above some near-term overhead resistance levels at $7.63 to its 50-day at $8.06 a share and then once it takes out more resistance at $8.41 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 301,406 shares. If that breakout hits soon, then SNFCA will set up to re-test or possibly take out its next major overhead resistance level at $9.42 a share. Any high-volume move above $9.42 would then put $12 to $13 into range for shares of SNFCA. Traders can look to buy SNFCA off weakness to anticipate that breakout and simply use a stop that sits just below its 200-day at $6.60 a share. One can also buy SNFCA off strength once it takes out those breakout levels with volume and then simply use a stop just below $7 a share. I would add to either position once SNFCA takes out resistance at $8.41 to $9.42 with heavy upside volume. This is a heavily-shorted stock, since the current short interest as a percentage of the float for SNFCA is 15.2%. Any bullish price action that pushes this stock into breakout territory could easily spark a monster short-squeeze, so make sure to have this name on your breakout trading radar.