One under-$10 name that's starting to push within range of triggering a major breakout trade is
), which is a provider of private mortgage insurance in the U.S. This stock has been in beast mode in 2013, with shares up 134%.
If you take a look at the chart for MGIC Investment, you'll notice that this stock has been trending sideways for the last two months, with shares trading between $6.60 on the upside and $5.51 on the downside. During that timeframe, MTG has run into major resistance six times when it's traded higher near $6.45 to $6.60 a share. This stock has just started to bounce off its 50-day moving average at $5.84 a share and is now quickly moving within range of breaking out above that major resistance zone. Since that zone has held buyers back for over two months, a breakout above it with volume would be a significant technical development.
>>5 Stocks With Big Insider Buying
Traders should now look for long-biased trades in MTG if it manages to break out above some near-term overhead resistance levels at $6.55 to $6.60 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 12.96 million shares. If that breakout triggers soon, then MTG will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $9 to $10 a share.
Traders can look to buy MTG off weakness to anticipate that breakout and simply use a stop that sits right below some key near-term support levels at $5.84 to $5.51 a share. One can also buy MTG off strength once it clears those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.