Another stock that looks poised to trigger a near-term breakout trade is
ANAD), which designs and manufactures radio frequency semiconductor solutions for cellular wireless, WiFi and infrastructure applications. This stock is off to a weak start in 2013, with shares off by 12.7%.
If you take a look at the chart for Anadigics, you'll notice that this stock has been uptrending for the last two months, with shares moving higher from its low of $1.67 to its recent high of $2.34 a share. During that uptrend, shares of ANAD have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of ANAD within range of triggering a near-term breakout trade.
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Market players should now look for long-biased trades in ANAD if it manages to break out above some near-term overhead resistance levels at $2.23 to $2.34 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 699,164 shares. If that breakout triggers soon, then ANAD will set up to re-test or possibly take out its next major overhead resistance levels at $2.87 to $3.22 a share. Any high-volume move above those levels will then put its next major overhead resistance level at $3.44 into range for shares of ANAD.
Traders can look to buy ANAD off any weakness to anticipate that breakout and simply use a stop that sits right below its 200-day at $1.91 a share, or below some more key near-term support at $1.80 a share. One could also buy ANAD off strength once it takes out those breakout levels with volume and then simply use a stop that sits a comfortable percentage from your entry point.