One more under-$10 name that looks ready to trigger a major breakout trade is Accuride (ACW), which manufacturers and supplies of commercial vehicle components in North America. This stock is off to a monster start in 2013, with shares up a whopping 76%.
If you take a look at the chart for Accuride, you'll notice that that this stock has been uptrending strong for the last month and change, with shares pushing higher from its low of $4.26 a share to its recent high of $5.73 a share. During that uptrend, shares of ACW have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of ACW within range of triggering a major breakout trade.
Traders should now look for long-biased trades in ACW if it manages to break out above some key overhead resistance levels at $5.74 to its 52-week high at $6.25 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 310,911 shares. If that breakout hits soon, then ACW will set up to re-test or possibly take out its next major overhead resistance levels at $7 to $8 a share, or even $9 a share.Traders can look to buy ACW off weakness to anticipate that breakout and simply use a stop that sits just below its 50-day at $5.02 a share. One can also buy off strength once ACW clears those breakout levels with volume and then simply use a stop right below some key near-term support levels at $5.25 to $5.13 a share, or even its 50-day at $5.02 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 Madison, Wis.
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